TURNOVER INTENT

DIPLOMA THESIS

Department: Strategie- und Unternehmenskonomik University of Zurich Human Resource Management Professor Dr. Bruno Staffelbach

Supervising tutor: Dorothea Brunner Subject area: BWL I Subject: Human Resource Management

Author: Mylene Perez Schracherstr. 14a, 8306 Brttisellen myleneperez82@yahoo.de Student ID Number: 02-728-285

Field of Study: BWL (Business Administration) Number of Semester: 10 Brttisellen, 18.06.2008

Turnover Intent

ABSTRACT
Voluntary employee turnovers incur significant cost for an organization. Thus it is important to identify turnover intents as early as possible in order to enable planners to help implement courses of action. Within the scope of this diploma thesis a review of literature on turnover intent is offered. Initially the importance of the phenomenon is established and exact definitions of the subject area are presented. Subsequently the potentially critical impact of turnover behavior on organizational effectiveness is discussed. Several theoretical concepts that explain the occurrence of the turnover intent, and five key models that shaped the research on turnover, are presented and partially critiqued. This study also analyzes the effect of various factors on turnover intent using data from the HR-Barometers 2007. These factors were categorized into psychological, economical and demographic determinants, as well as moderating factors. The results revealed that the psychological determinants, such as psychological contract and job satisfaction, were the strongest significant predictors of future quits. Freiwillige Kndigungen von Arbeitnehmenden sind fr Unternehmen mit sehr hohen Kosten verbunden. Es ist daher von zentraler Bedeutung die Kndigungsabsichten schon frhzeitig zu erkennen, um ihren Ursachen entgegen wirken zu knnen. Im Rahmen dieser Diplomarbeit wird ein Literaturberblick ber Kndingsabsichten aufgezeigt. Zunchst einmal wird die Relevanz dieses Phnomens erklrt und dann werden verschiedene Begriffe von diesem Themenbereich definiert. Danach werden potenzielle und kritische Auswirkungen des Kndigungsverhaltens auf die Effektivitt der Unternehmen untersucht. Einige theoretische Konzepte, welche die Entstehung von Kndigungsabsichten erklren, wie auch fnf entscheidende Modelle, welche die Forschung ber Kndigungen geprgt haben, werden vorgestellt und zum Teil kritisch analysiert. Diese Arbeit untersucht auch verschiedene Ursachen von Kndigungsabsichten, dies mittels einer empirischen Analyse der Daten des HR-Barometers 2007. Die Ursachen wurden in psychologische, konomische und demographische Determinanten, sowie Moderatoren unterteilt. Es wird gezeigt, dass psychologische Determinanten, wie der Psychologische Vertrag und Arbeitszufriedenheit, die strksten Prdiktoren von zuknftigen Kndigungen sind. Keywords: TURNOVER INTENT, VOLUNTARY TURNOVER, JOB MOBILITY

Turnover Intent

Contents
1. Introduction ............................................................................................................................... 6 1.1. Starting Position ...................................................................................................................... 6 1.2. Turnover in Switzerland ........................................................................................................... 6 1.3. The Purpose of the Study ......................................................................................................... 8 1.4. Procedure ................................................................................................................................ 9 2. Theoretical Background ............................................................................................................ 11 2.1. Definitions ........................................................................................................................ 11 Turnover ................................................................................................................... 11 Turnover Intent .......................................................................................................... 14

2.1.1. 2.1.2. 2.2.

Consequences of Turnover................................................................................................. 15 The Impact of Turnover on Organizational Cost........................................................... 15 Operational Disruption ............................................................................................... 16 Demoralization of Organizational Membership ............................................................ 16

2.2.1. 2.2.2. 2.2.3. 2.3.

Reference Theories Explaining Voluntary Turnover Intent Behavior .................................... 18 Social Exchange Theory ............................................................................................. 18 Human Capital Theory ............................................................................................... 18 Search Theory ........................................................................................................... 19 Matching Theory ....................................................................................................... 20 Equity Theory............................................................................................................ 20 Organizational Equilibrium Theory ............................................................................. 21

2.3.1. 2.3.2. 2.3.3. 2.3.4. 2.3.5. 2.3.6. 2.4.

Turnover Process Models .................................................................................................. 23 March & Simons Model ............................................................................................ 23 Mobleys Model ........................................................................................................ 25 Sheridan and Abelsons Model ................................................................................... 26 Price and Muellers Model ......................................................................................... 29 Lee and Mitchells Model........................................................................................... 31 Conclusion ................................................................................................................ 33

2.4.1. 2.4.2. 2.4.3. 2.4.4. 2.4.5. 2.4.6. 3.

Factors that have an Impact on Turnover Intent .......................................................................... 34 3.1. Determinants ......................................................................................................................... 35 3.1.1. Psychological determinants ........................................................................................ 36

Turnover Intent

3.1.2. 3.1.3.

Economic determinants .............................................................................................. 42 Demographic determinants ......................................................................................... 44

3.2. Moderators ............................................................................................................................ 45 3.2.1. 3.2.2. 4. Gender ...................................................................................................................... 46 Education .................................................................................................................. 46

Methodology ............................................................................................................................ 48 4.1. Procedure .............................................................................................................................. 48 4.2. Data set: HR-Barometer 2007.............................................................................................. 48 4.3. Participants ........................................................................................................................... 48

5.

Results ..................................................................................................................................... 51 5.1. Statistical Analysis ............................................................................................................ 51 Psychological Determinants of Turnover intent ............................................................ 51 Economic Determinants of Turnover intent ................................................................. 53 Demographic Determinants of Turnover intent ............................................................ 54 Integrated Model of Turnover ..................................................................................... 55 Moderators ................................................................................................................ 56

5.1.1. 5.1.2. 5.1.3. 5.1.4. 5.1.5. 5.2. 6.

Discussion ........................................................................................................................ 59

Summary ................................................................................................................................. 62 6.1. 6.2. 6.3. 6.4. Research results ................................................................................................................ 62 Limitations ....................................................................................................................... 63 Future Research ................................................................................................................ 63 Conclusion ....................................................................................................................... 66

7.

References ............................................................................................................................... 67

Turnover Intent

Figure and Table Contents

Figure 1: Development of Turnover Rate 1996-2005 ..................................................................... 7 Figure 2: Turnover Intent: An International Comparison ............................................................... 8 Figure 3: Avoidability-Matrix ....................................................................................................... 13 Figure 4: Simplified Version of March and Simons Model ........................................................ 24 Figure 5: Mobleys Employee Turnover Decision Process Model ............................................... 26 Figure 6: Sheridan and Abelsons Cusp-Catastrophe Model ........................................................ 28 Figure 7: Price and Muellers Causal Model ................................................................................ 30 Figure 8: Lee and Mitchells Unfolding Model ............................................................................ 32 Figure 9: A General Illustration of Turnover ................................................................................ 34 Figure 10: Turnover Intent Response-HR Barometer 2007 .......................................................... 49 Figure 11: Turnover Intent by Industry HR-Barometer 2007 ....................................................... 50 Figure 12: Gender Effect on the Relationship between Commitment and Turnover intent ......... 56 Figure 13: Gender Effect on the Relationship between Job Satisfaction and Turnover intent ..... 57 Figure 14: Moderator Education-Gender-Turnover Intent............................................................ 58

Table 1: Definition Voluntary and Involuntary Turnover............................................................. 12 Table 2: Relationship between Actual Turnover and Turnover Intent.......................................... 14 Table 3: Several Categories of Expenses by Cascio ..................................................................... 16 Table 4: Determinants for Voluntary Turnover Subdivided into Categories ................................ 35 Table 5: Bipartisan Expectations................................................................................................... 37 Table 6: Regression Psychological Determinants of Turnover Intent .......................................... 52 Table 7: Regression Determinants of Job Satisfaction.................................................................. 53 Table 8: Regression Economic Determinants of Turnover Intent................................................. 54 Table 9: Regression Demographical Determinants of Turnover Intent ........................................ 54

Turnover Intent

Table 10: Regression Integrated Model of Turnover Intent .......................................................... 55 Table 11: Regression Moderator Education-Age-Turnover Intent ............................................... 58

List of Abbreviations
e.g. et al. HR ISSP p. = Exempli Gratia (for example) = Et alii (and others) = Human Resource = International Social Survey Program = Page

SAKE = Schweizerische Arbeitskrafterhebung

Turnover Intent

1.

Introduction

1.1. Starting Position

As several authors point out (e.g. Price, 2001/Hom&Griffeth, 1991), turnover is one of the most researched phenomena in organizational behavior. In this research, as it is typical for most studies on turnover, the focus was on members leaving rather than entering the organization, furthermore the attention was on voluntary turnovers. The broad range of turnover studies is indicative of the significance and complexity of the issue. The phenomenon attracts interest due to its psychological dimension, its organizational significance, and its economic dimension. A topic strongly related to voluntary job mobility is turnover intention. In this study turnover intent rather than turnover was used as the dependent variable. The importance of analyzing turnover intention draws upon a number of recent research papers (e.g. Mobley, 1977/ Hom&Griffeth, 1991) that have assessed its role in forecasting and understanding actual quits. Turnover intention was reported to be highly correlated with actual turnover. Voluntary turnovers create significant cost, both in terms of direct cost, such as replacement, or in terms of indirect cost, such as the pressure on remaining staff or the loss of social capital (Staw, 1980). Explanation of voluntary turnover has relevant implications for organizational manpower planning. It is important to identify turnover intent as early as possible in order to enable planners to help implement courses of action.

1.2. Turnover in Switzerland

The turnover issue also plays a major role in Switzerland. The most recent study about job mobility in Switzerland was conducted by Henneberger and Sousa-Poza in 2007. They revealed that the macroeconomic turnover rate tends to follow the economic trend (Hennberger&SousaPoza, 2007: p. 17). It has increased since the mid-90s until 2000 (with the lowest rate in 1997, where unemployment showed the highest rate). It remained at the same stage for the next two years, and subsequently decreased since 2002. This development is illustrated in Figure 1. Their empirical examination was based on SAKE (Schweizerische Arbeitskrafterhebung) and thereby resulted a turnover rate of 9.7% in year 2005. Therewith around 300000 employees in Switzerland are yearly changing their job (Henneberger & Sousa-Poza 2007: p. 17).

Turnover Intent

Disaggregated by industry, the results showed that the turnover rate is particularly high in the hotel and restaurant industry as well in the area of real estate, renting, information technology. The lowest rate is registered in public industry (Henneberger & Sousa-Poza 2007: p. 82). Figure 1: Development of Turnover Rate 1996-2005

(SAKE in Henneberger&Sousa-Poza, 2007: p. 33) An international comparison of turnover intent based on the International Social Survey Program (ISSP) about Work Orientations in 2005 is illustrated in Figure 2. The question was How likely: try to find a job within the next 12 months. The results showed that Switzerland has a quota of 8.74%, which is 1.21% percentage point below the average turnover rate of 9.95% of all the 32 analyzed countries (see Figure 2). Particular high turnover rates resulted next to France (17.48%) and Mexico (17.42%), USA (15.08%), Dominican Republic (14.63%), New Zealand (14.47%) and Australia (14.26%). Low turnover rate was shown in Japan (3.74%) and Czech Republic (3.11%). The low rate in Japan can be explained by the prevalent lifelong employment relations (Henneberger&Sousa-Poza 2002: p. 100).

Turnover Intent

Although Switzerlands turnover rate has declined over the past years, it would be too early to argue that this could be a persistent trend. This still needs to be observed during the following years. Thus the turnover issue remains to be important in Switzerland. Figure 2: Turnover Intent: An International Comparison

(ISSP 2005)

1.3. The Purpose of the Study

Owing to the importance of job mobility in the Swiss labor market, turnover became an important issue for the HR-Management. Since voluntary turnovers implicate various consequences, it is necessary to detect them at an early stage. Preventing unintentional job mobility can be accomplished by understanding turnover intent, since it has been examined as the immediate precursor to actual turnover. Revealing turnover intent can help forecasting actual quits.

Turnover Intent

There are well established traditions of using models in research and dispersion of theory about turnover behavior. Several theories and key models need to be discussed, in order to understand reasons and backgrounds of this phenomenon. Therefore one purpose of this study is: a) To examine several theories, how they describe and explain reasons for turnover, respectively turnover intention. When it comes to interpreting turnover behavior and understanding the enormous impact the issue discussed, several factors on turnover intent have to be examined. Based on theoretical backgrounds, these factors need to be evaluated with an empirical analysis. The second purpose of this study is: b) To conduct an empirical derivation of factors that have an impact on turnover intent of Swiss employees based on the HR Barometer 2007.

1.4. Procedure
The aim of this study is to provide an overview about the theoretical background of turnover intent. Additionally an empirical analysis, based on the HR Barometer 2007, needs to be carried out in order to understand the different impact of factors on turnover intent. The present study is structured in six chapters, which is illustrated on the following page. The first chapter provides an introduction of the topic. Initially the importance of the subject area is established. The purpose is being defined and the procedure becomes apparent. The second chapter offers a theoretical background of the turnover phenomenon, starting with exact definitions followed by the presentation of the potentially critical impact of turnover behavior on organizational effectiveness. Further, theoretical concepts will be presented and then related to the occurrence of turnover intent. Established models that have shaped the turnover research are discussed and critiqued. In the third chapter, factors that have an impact on turnover intent are categorized into psychological, economic and demographic determinants as well as moderating variables. An empirical analysis, based on HR-Barometer 2007, will be conducted in order to evaluate the different suppositions. The final chapter implies a summary of the core findings and offers suggestions for future investigations.

Turnover Intent

10

1. Introduction
- Starting Position - Turnover Intent in Switzerland - Purpose of the Study - Procedure

2. Definitions
- Turnover - Turnover Intent

3. Consequences of Turnover
- Impact on Organizational Cost - Organizational Disruption - Demoralization of Organizational membership

4. Reference Theories
- Explaining turnover behavior with established theories

5. Turnover process
- Presenting key models that shaped the turnover research

6. Factors
- Determinants Based on HR Barometer 2007 - Moderators

7. Empirical Analysis based on HR Barometer 2007

8. Overall Summary and Future Research

Turnover Intent

11

2.
2.1.

Theoretical Background
Definitions

2.1.1. Turnover Turnover is defined as the individual movement across the membership boundary of an organization (Price, 2001: p. 600). The concept individual refers to the employees within an organization and the notion of movement can be interpreted either as an accession or a separation of the company. In turnover literature, authors also used other labels for turnover, such as quits, attrition, exits, mobility, migration or succession. A crude measurement of turnover would be (Morrell et. al, 2001: p. 10): Leavers in year x Average number of employees during year However, this measurement of turnover is rarely used, since it fails to distinguish between cases where individuals have decided to leave and cases where they had to leave, as well as ignoring the reasons why they leave is important to consider (Morrell et al., 2001: p. 10). Therefore three fundamental characteristics of turnover will have to be discussed: voluntariness, avoidability and functionality. It should be emphasized that this studys concern would be the voluntary, avoidable and dysfunctional turnover. Voluntariness Since turnover is often associated with variables, such as job satisfaction, it is important to distinguish voluntary from involuntary turnover, otherwise the estimation of such a relationship in terms of all leavers will be inaccurate. Most of the researches attention was concentrated on the members, which voluntarily leave the organization, since most of the turnovers are voluntary and subject to control by managers (e.g. Morrell et al., 2001/Price, 2001). Managers focus their attention on a phenomenon capable of some degree of control. A wide range of determinants have been found useful when it comes to interpreting voluntary turnover. It is known that a high amount of voluntary turnover adversely affects organizational effectiveness. 100

Turnover Intent

12

Table 1: Definition Voluntary and Involuntary Turnover Types Voluntary turnover Definition ..voluntary cessation of membership of an organization by an employee of that organization.(Morrell et al., 2001: p. 6) Involuntary turnover ..movement across the membership boundary of an organization, which is not initiated by the employee. (Price, 1977: p. 9) Dismissal Retrenchment Death Examples Resignation

Avoidability Another important consideration for the organizational concern is the avoidability of voluntary turnover. It deals with the question whether the decision to leave could have been prevented by the organization. This is important for the planning of interventions. For instance, if a company identifies their voluntary turnover is unavoidable (e.g. relocation by a spouse), it would be more beneficial to manage turnover post hoc, rather than to spend on theorized preventive measures, such as increasing pay. These losses of employees can also be described as necessary causalities (Morrell et al., 2004: p. 164). In this case, managers focus on minimizing the disruption and inconvenience of the lost. Yet, if the reason for voluntary turnover is avoidable, then managers have the possibility to intervene in order to prevent the cessation. Unfortunately a pure split is not feasible. When managers sometimes assume turnovers being inevitable, but in real terms are avoidable, they may fail to detect underlying issues in the organization. The associated costs of the lost of employees may be unnecessary tolerated, whereas prevention have been more beneficial. In contrast when the perceived voluntary turnover is seen as avoidable, but in reality it was unavoidable, managers could spend money on useless prevention measures (Morrell et al., 2001: p. 9). This is illustrated in Figure 3.

Turnover Intent

13

Figure 3: Avoidability-Matrix

(Morrell et al., 2001: p. 60) Functionality Most studies on turnover have associated turnover with a negative impact on organizational effectiveness. Dalton et al. (1981) modified this perspective. Their study distinguished two types of leavers, in terms of their productivity and the extent to which they are an asset to the organization (Morrell et al., 2001: p. 12). It shows that turnover can also be beneficial for an organization. An example for a functional turnover would be the replacement of unproductive employees with productive ones, thus dysfunctional turnover would be interpreted as losing productive employees. For managers it is important whether a turnover brings an opportunity to gain more productive employees (for functional turnover) or forces them to reorganize current work settings (for dysfunctional turnover). (Morrell et al., 2001: p. 12)

Turnover Intent

14

2.1.2. Turnover Intent Unlike actual turnover, turnover intent is not explicit. Intentions are a statement about a specific behavior of interest (Berndt, 1981: p. 636). Turnover intent is defined as the reflection of the (subjective) probability that an individual will change his or her job within a certain time period (Sousa-Poza&Henneberger, 2002: p. 1) and is an immediate precursor to actual turnover. A broad range of literature examining the relationship of turnover intent and actual turnover (e.g. Mobley, 1977/ Hom&Griffeth 1991) exists. Actual intention and turnover intention have been measured separately; however, actual turnover is expected to increase as the intention increases. The results of the different studies provide support for the high significance of turnover intention in investigating the individuals turnover behavior. Turnover intention captures the individual's perception and evaluation of job alternatives (Mobley et al., 1979). In Henneberger and Sousa-Pozas study, it resulted that the decision on job mobility is rather been made by employees in the short run (Hennberger&Sousa-Poza, 2007: p. 20). Not all employees who intended to change their job had an actual turnover. On the contrary, employees, who did not intend it, had actual turnovers (see Table 2). It shows that, on the one hand, employees react quite sensitive to sudden appeared options; on the other hand, employers should be able to prevent successful employees from job mobility. Table 2: Relationship between Actual Turnover and Turnover Intent No Job Mobility Turnover intent not announced in 2004 95.39% Turnover intent announced in 2004 74.81% 93.43% Job Mobility 4.61% 25.19% 6.57% Total 90.48% 9.52% 100%

Note: Spearman-Correlation coefficient = 0.2343 (1% significance level) (SAKE 2004/2005-Henneberger&Sousa-Poza, 2007: p. 102)

Turnover Intent

15

2.2.

Consequences of Turnover

The purpose of this chapter is to discuss the different consequences of turnover and to point out turnover as a crucial organizational issue. Although turnover may also bring positive consequences for instance the reallocation of organizational resources (Staw, 1980: p. 258), this studys focus will be on negative consequences of turnover. Three important negative consequences, which have an impact on organizational effectiveness, will be discussed below: the impact on organizational cost, operational disruption and demoralization of organizational membership. 2.2.1. The Impact of Turnover on Organizational Cost Organizational efficiency has been shown to be highly correlated with a low turnover rate. Studies dealing with the impact of turnover are dominated by a concern with organizational effectiveness, which is defined as the extent to which the system achieves its goals (Price, 1977: p. 110). The financial impact of turnover is usually expressed in monetary terms. Cascio in 1991 made the most significant contribution in this respect, discussing the extent to which turnover cost are important (Tziner&Birati, 1996). Table 3 illustrates his model that consists of categories of expenses. According to Cascio, the summation of the components of the three major categories should constitute the expense of an employee turnover (Tziner&Birati, 1996: p. 114). Additionally, several other studies extended Cascios list with further categories. In Tziner and Biratis study (1996) they argued that Cascio neglects to discuss the distinction between functional and dysfunctional turnover, namely the cost of the reduced productivity of the new worker during the period required for the level of performance of the previous employee to be reached (Tziner, 1996; p. 114). If bad performers choose to leave, this could carry beneficial outcomes for the organization. However, if it is a dysfunctional turnover, then the loss of an esteemed employee can engender a loss of productivity. Another category is named the vacancy costs that refers to the expenses that incurred due to increased overtime or temporary workers that are employed to complete the tasks of the vacant position (www.uwex.edu).

Turnover Intent

16

Table 3: Several Categories of Expenses by Cascio Separation Cost the costs incurred for exit interviews administrative functions related to termination separation/severance pay Replacement Cost advertising position availability in various media entrance interviews holding decision making meetings Training Cost Norms of conduct and performance Disseminating relevant information for organizational socialization Participation in on-the-job training activities (Tziner et al, 1996: p.114) 2.2.2. Operational Disruption Operational disruption occurs when high interdependence of work roles within the company exists. The loss of key members in an organization which is characterized as being highly interdependent and specialized can influence the ability of other remaining members to fulfill their work task. In some companies higher turnover rate is expected to find in lower hierarchy levels. Replacing these positions is not that difficult for the organization. The author argued that the higher the level of position to be filled the greater the potential for disruption (Staw, 1980: p. 256). This problem can be solved with back up personnel or employees can be trained with multiplicity skills. (Staw, 1980: p. 256) 2.2.3. Demoralization of Organizational Membership The demoralization of organizational membership refers to the impact of turnover on attitudes of the remaining members. If a person decided to leave for an alternative position in an external environment, it may provoke a reflective sentiment with remaining members, such as

Turnover Intent

17

questioning their own motivation to stay in the organization. Thus turnover can cause additional turnover by stimulating deterioration in attitudes towards the organization. (Staw, 1980: p. 257) The perceived reason of leaving is one essential factor for demoralization of organizational membership. If the reason for quitting is a non-organizational matter, such as family issues or location change, then the feeling of demoralization is less existent. Yet if the reason is rather dependent on organizational dimensions, such as pay or supervisory support, then it will likely lead to demoralization. If those who leave are members of a cohesive work group or possess high social status among the organizational membership, then turnover will likely lead to greater demoralization (Staw, 1980: p. 257).

Turnover Intent

18

2.3.

Reference Theories Explaining Voluntary Turnover Intent Behavior

2.3.1. Social Exchange Theory

Social exchange theory is based on the idea that social behavior is the result of an exchange process, whose purpose it is to maximize benefits and minimize costs. The beginnings of this theory can be traced to the studies of Thibaut and Kelley, Homans and Blau (Brinkmann&Stapf, 2005: p. 24). The exchange can be understood in terms of material and non-material goods, such as the symbols of approval or prestige (Homans, 1961: p. 12). According to this theory, individuals consider potential reward and risks of social relationships. Further it implies that all human relationships are shaped by using a subjective reward-cost analysis and the comparison of alternatives. Someone who gives much will expect to get at least the same amount back from others and in return persons that receive a lot from others will be under pressure to give much back to them. People will terminate or abandon the relationship as soon as the costs outweigh the benefits (Farmer&Fedor, 1999: p. 352). The viability of social exchange theory is based on the assumption that individuals recognize ones life situations and notice each ones needs. It also refers to the principal of reciprocity, whereby privileges granted by one are returned by the other. The interaction between humans will be noticed consciously and in some way reciprocated. The willingness to generate an advance performance will be responded with a payback, either soon or with a time delay. (Brinkmann&Stapf, 2005: p. 24)

2.3.2. Human Capital Theory

The core thesis of human capital theory is that humans learning functions are comparable with other natural resources which are involved in the production process (Becker, 1993). The theorys roots are in the work of Adam Smith or William Petty. Yet it was Gary Becker who extensively developed the human capital theory in 1964. The concept of human capital claims that not all work is equal and that the employees quality can be increased by investing in them (Becker, 1993). According to Becker (1993), education and training are the most important investment in human capital. Learning capacity is closely related to earning level, thus it can raise a persons income. The earnings of more educated people are mostly above average. The

Turnover Intent

19

education, experience and skills of a worker have an economic value for employers and for the economy as a whole. It emphasized that effective employees have to be constant learners in order to compete in an increasingly globally competitive enterprise environment. Hence occupational wage differentials refer to the amount of investment in human capital (Henneberger&SousaPoza, 2007: p. 53). There are two major forms of human capital investment; schooling and on-the-job training. Becker defined a school as an institution specializing in the production of training (Becker, 1993: p. 51), such as university or high school. On-the-job training relates to the increasing productivity of employees by learning new skills and perfecting old ones while on the job (Becker, 1993: p. 31). It can be distinguished between general and specific training. Training can be seen as general, if the acquired skill can also be used in another company. For example, a doctor trained in one hospital finds his skills also beneficial at other hospitals (Becker, 1993: p. 33); whereas specific training is defined as training that has no effect on the productivity of trainees that would be useful in other firms (Becker, 1993: p. 40). The development of capability requires both specialization and experience and can be gained partly from schools and partly from companies. Employees that possess a high amount of company specific training will hardly find alternatives that meet their expectations, such as wages. Based on this theory, it can be assumed that company specific training has an inverse relationship to turnover intent. The higher the investments are on specific knowledge, the higher the considered transaction costs (Henneberger&Sousa-Poza, 2007: p. 53).

2.3.3. Search Theory

The search theory can be traced back to George Stiglers analysis how buyers (or sellers) acquire information as an investment. He argued that a buyer (or a seller) who wishes to ascertain the most favorable price must canvass various sellers (or buyers) (Stigler, 1961: p. 213). A special concern in this study is the workers optimal strategy when choosing from various potential opportunities in the labor market. The individual imperfect knowledge of labor market variables requires the usage of a so called reservation price for the search of employment various alternatives (Morrell et al., 2001: p. 23). Reservation price is defined as the lowest salary or

Turnover Intent

20

wage at which a person will consider accepting a job and can be thought of as a short-hand heuristic which people use to decide whether to accept / reject a job offer in the face of little other information from the labor market (Holt and David, 1966 in Morrell et al., 2001: p. 23). It is seen as endogenously determined, suggesting that it depends on opportunities in the labor market (Morrell et al., 2001: p. 23). For employees, search generates alternative positions or workplace outside the present organization, which can lead to actual turnover. Therefore job search was detected as an important precursor to quitting in several studies (e.g. Mobley et al., 1979). Job search can also lead to the appreciation of ones present job after comparing it with the alternatives (Morrell et al., 2001: p. 24).

2.3.4. Matching Theory

Matching Theory describes a process where humans or other organisms distribute their behavior in relation to the rate of reinforcement for response alternatives (Mace, 1990: p. 197). It gives an understanding about the appearance and the termination of a work contract under uncertainty. Employees strive for those positions which match best with their capabilities that correlate with appropriate wages. Employers tend to fill positions, so that they can maximize their benefit (Henneberger&Sousa-Poza, 2002: p. 28). Employees productivity in a particular job is not known in advance but rather appears precisely as the workers job tenure increases (Jovanovic, 1979). The benevolence of a match reveals in the course of the employment relationship. Therefore younger employees launch an experimental stage at the beginning of their professional life, where they gain experiences and diminish lack of information. In this context, job mobility can be understood as a mechanism for correcting matching failures (Henneberger&Sousa-Poza, 2002: p. 28).

2.3.5. Equity Theory

Equity theory, also known as justice theory, was developed by John Stacey Adams in 1963 and can be categorized in job motivational theory. It proposes that individuals determine whether the distribution of resources is fair to both relational partners (Brinkmann&Stapf, 2005: p. 26). In organization, the Equity theory of employee motivation describes the fair balance to be struck

Turnover Intent

21

between an employees inputs, such as hard work, skill level, tolerance or enthusiasm and an employees outputs, such as salary, benefits or intangibles issues. Justice is existent, when inputs and outputs are fairly distributed among the participants, whereas the impartial criteria of the situation are less important than the way, how individuals estimate the value and the relevance of the inputs and outputs of the different participants (Brinkmann&Stapf, 2005: p. 26). Thus a highly motivated employee perceives his rewards to be equal to his contributions. He will judge to be treated fairly, when he feels that he is working and being rewarded at about the same rate as his peers. It should be emphasized that factors can affect each persons assessment and perception of their relationship with their relational partners differently; hence every employee does not measure his contributions in the same way. According to Leventhal, employees evaluate the fairness of the procedural justice regarding following criteria (Brinkmann&Stapf, 2005: p. 27): The procedure must not contradict ethical standards. The allocation has to be applied consistently over time and people. Decisions have to consider the interest of everyone. The person, who uses the procedural method, should not be influenced by self-interest. The procedural method should contain correction possibility in order to revise decisions, for instance through objection. Based on the Equity theory, if an employee perceives the distribution of resources as unfair, then turnover intent will emerge.

2.3.6. Organizational Equilibrium Theory

Barnard provided a systematic framework where he discussed human motivations that are involved in the decision to belonging, which is also known as the organizational equilibrium. He argued that the equilibrium of an organization means the capacity to maintain efficiency of an organization (Mano, 1994: p. 17). Organizations are dependent on the continuity of participants contributions and in order to maintain this, organizations have to offer equitable inducements. Thus Barnards specific evolution is the decision to participate, in other words

Turnover Intent

22

balancing of burdens by satisfactions which results in continuance (Barnard, 1938: p. 57). According to Barnard, if the personal sacrifice is bigger than the inducements he gets, then the person will withdraw his contributions and will leave the company. Simon extended Barnards theory into the Barnard-Simon Organizational Equilibrium theory, which builds on Barnards observations. Simon argued that the achievement of organizational equilibrium contains the condition that the sum of contribution of all employees ensures the kinds and quantity of necessary inducements (Mano, 1994: p. 18). However, he did not consider the functions of the organization, such as the process of creation, transformation or exchange of utilities where Barnard also placed his emphasis (Mano, 1994: p. 26).

Turnover Intent

23

2.4.

Turnover Process Models

Several studies were already conducted that focused on developing and estimating a causal model specifying the factors of voluntary turnover. The common theme which can be observed from the following described models is that turnover behavior is a multistage process that includes behavioral, attitudinal, and decisional components (Barak et al., 2001: p. 628). Five turnover models are presented below, which are chronologically listed. These key models have shaped the research on turnover behavior and therefore need to be discussed.

2.4.1. March & Simons Model

Many studies of voluntary turnover are to some degree descendants of the March and Simon (1958) framework (e.g. Mobley, 1977/Lee et.al, 1999). Their model can be traced back to Barnard-Simons theory of organizational equilibrium where they argued that all employees confront with decisions through their interaction with the company (Mano, 1994). A special concern in this study is the decision to participate with the key variable desirability and ease of movement in and out of the organization (Bowen&Siehl, 1997: p. 57). The theory specifies that employees decision to resign is influenced by two factors: their perceived ease of movement, which refers to the assessment of perceived alternatives or opportunity and perceived desirability of movement, which is influenced for instance by job satisfaction (Morrell et al., 2001: p. 34-35). This describes how balance is struck both for the organization and its employees in terms of inducements, such as pay, and contributions, such as work, which ensures continued organizational efficiency. When inducements are increased by the company, this will lower the tendency of the worker to leave and vice versa (Morrell et al., 2001: p. 34). Many limitations of March and Simons model exist. Their model more presents a static rather than a procedural view of turnover. They also failed to include important variables that influence the turnover process, such as role stress or different forms of organizational commitment (Morrell et al., 2001: p. 35). Some theorists asserted, that March and Simons model has overly influenced further studies about employee turnover and that their success may have constrained other aspects (e.g. Lee and Mitchell, 1999).

Turnover Intent

24

Figure 4: Simplified Version of March and Simons Model

(Morrell et al., 2001: p. 62)

Turnover Intent

25

2.4.2. Mobleys Model

The employee turnover decision process by Mobley (1977) has shaped the course of turnover studies for the past decade. He pioneered an extensive explanation for the psychological turnover process. Mobleys model is based on several former preceding studies, for instance March and Simons theory (1958) about ease and desirability of work concept and Porter and Steers model (1973) of met-expectation and intent to leave. The model is heuristic rather than descriptive (Mobley, 1977: p. 239). A schematic representation of the turnover decision process is illustrated in Figure 5. The termination decision process can be described as a sequence of cognitive stages starting with the process of evaluating the existent job followed by the emotional state of satisfaction or dissatisfaction. One consequence of dissatisfaction is to initiate thought of quitting. The next step is the evaluation of the expected utility of search (e.g. desirability of possible alternatives travel or lost work time) and of the cost of quitting (e.g. loss of vested benefits). If perceived possibility of finding an alternative is available and if the costs are not that high, the next step would be behavioral intention to search for alternatives followed by an actual search. If alternatives are existent, then an evaluation of alternatives will proceed. Afterwards a comparison of the present job to alternatives will follow. If the comparison favors the alternative, then behavioral intention to quit will be stimulated, followed by the final decision to quit. (Mobley, 1977: p. 237-239) Other later studies extended Mobleys model by including other variables, such as organizational commitment (e.g. Kim et al., 1996) or examined factors that affect job satisfaction more precisely (e.g., Price&Mueller, 1981). Mobleys model features frail on empirical evidence for the conceptual differentiation among his explanatory constructs (Hom&Griffeth, 1991: p. 350). Subsequent models enhanced Mobleys construct. One of the established theoretical alternatives was Hom et al.s model in 1984 (Hom&Griffeth, 1991). They argued that Mobleys theory had a lack of empirical evidence for the conceptual distinction among his explanatory constructs. However, their findings to some extent showed a similar possible intermediate step in the turnover process, yet a major distinction exists. Their study resulted that the Intention to Quit takes place before an Intention to Search.

Turnover Intent

26

Figure 5: Mobleys Employee Turnover Decision Process Model

(Mobley, 1977: p. 238)

2.4.3. Sheridan and Abelsons Model

One established model is called the cusp-catastrophe model and has been developed by Sheridan and Abelson (1983) to explain job turnover of nursing employees. Compared to the

Turnover Intent

27

prior models it offers a more complex illustration of the turnover process (see Figure 6). Sheridan and Abelson based their work on the mathematical Catastrophe theory, which considers the dynamic withdrawal process that occurs over time and a discontinuous change from retention to termination (Morrell et al., 2001: p. 43). The model has three main characteristics. Firstly, the withdrawal behavior is a discontinuous variable with abrupt changes, which is characterized with a delay rule. According to this, an employee attempts to retain in employment as long as possible. If the employee feels that he cannot stay any longer, due to job dissatisfaction or stress, then he will abruptly change from retention to termination. Secondly, characteristic is the presence of the hysteresis zone of behavior for some values of the control factors and is being described as the fold in the behavioral surface. The trace of the fold can be seen on the control surface and is named as the bifurcation plane. It represents a state of disequilibrium for employees, in which they are about to change from retention to termination. Thirdly, the divergence of behavior occurs on opposite sides of the bifurcation plane. As employees approach the bifurcation plane, very small changes in the control variables, such as job tension or stress, can result in discontinuous changes from retention to termination. (Sheridan&Abelson, 1983: p. 419-420) One crucial limitation of this study assumes linear and continuous relationships between the listed factors and turnover. It fails to reflect the threshold nature of the phenomenon (Morrell et al., 2001: p. 44). However, Sheridan and Abelsons model offered two fundamental contributions to the turnover research. First they recognized the discontinuous dynamic characteristic of turnover and second because of its provocative divergence from traditional view of the turnover process it indicates another direction for future research (Morrell et al., 2001: p. 44).

Turnover Intent

28

Figure 6: Sheridan and Abelsons Cusp-Catastrophe Model

(Sheridan&Abelson, 1983, in Morell et al., 2001: p.63)

Turnover Intent

29

2.4.4. Price and Muellers Model

Price and Muellers model from 1986 analyzes the causal determinants of turnover (Morrell et al., 2001). Determinants of voluntary turnover are based on empirical research conducted that has been since 1972 at the University of Iowa. Compared to March and Simons framework this model offers a comprehensive list of determinants, such as generic factors like job satisfaction. Turnover is interpreted as the result of a decision process (Morrell et al., 2001: p. 38). Exogenous variables, which are independent from the states of other variables in the model, are subdivided into three major groups: Environmental (e.g. Opportunity and kinship responsibilities), individual (e.g. General training) and structural (e.g. Routinization) groups (Price, 2001: p. 601). Endogenous variables which values are determined by the states of other variables in the model (www.personal.umd.umich.edu) are job satisfaction, organizational commitment and intent to leave. Several unidirectional causal relationships with the dependent variable turnover are illustrated in Figure 7. In the meantime, Price and Mueller enhanced their model by adding other exogenous (e.g. social support) and endogenous (e.g. search behavior) variables in their construct (Price, 2001). Nevertheless, this model also shows some limitations. There is a lack of fundamental theory of behavior or action, thus this limits an adequate explanation for the turnover process. The sample featured a lack of occupational heterogeneity, since they conducted their tests mostly on middle class jobs, such as nurses or teachers. They also failed to investigate interaction effects regarding the determinants of turnover (Morrell et al., 2001: p. 38).

Turnover Intent

30

Figure 7: Price and Muellers Causal Model

(Price&Mueller, 1986 in Morrell et al., 2001: p. 63)

Turnover Intent

31

2.4.5. Lee and Mitchells Model

The model by Lee and Mitchell established in 1994 describes different psychological paths that employees take when leaving organizations. It resulted that many people quit their jobs not only due to negative affects (e.g. job dissatisfaction), but because of the variety of particular jarring events, identified as shocks (e.g. unsolicited job offer, changes in martial state or firm mergers). The authors argued that most people follow one of four psychological and behavioral paths when leaving. Major components (shocks, scripts, image violations, satisfaction and job search) were used to categorize leavers into one of the four paths (Lee and Mitchell, 1994: p. 451). Figure 8 depicts the unfolding models four theorized paths. Path 1 describes how a shock can trigger the enactment of a script. This script details a plan of action and can be based on past experience, observation of the experience of others or social expectations. The employee quits without considering other job alternatives. Moreover, job satisfaction seems to be irrelevant in the decision process in path 1. In path 2, a shock initiates an employee to reconsider his attachment to the organization, since image violations are perceived by the employee. Image violations occur when an individual's values, goals, and strategies for goal attainment do not fit with those of the employing organization or those implied by the shock. The person leaves without searching for other alternatives. In path 3, a shock generates an image violation. Consequently this induces a persons evaluation of the current job and several alternatives. In path 4, the precipitator is job satisfaction. Some employees who experience job dissatisfaction simply leave without having other alternatives (Path 4a), while other dissatisfied workers quit only after searching and evaluating other jobs (Path 4b) (Lee&Mitchell, 1999: p. 451-452). Path 4b represents the turnover process suggested by many theorists. The other paths suggest processes that have not been discussed in the literature before. The unfolding model is a contemporary example of an account which represents a break from the established paradigm (Morell, 2001: p. 48). However, this model still features some unexplainable paths, which should be examined in order to understand the turnover process as a whole.

Turnover Intent

32

Figure 8: Lee and Mitchells Unfolding Model

(*) indicates that the route is not classifiable and that it represents a theory falsificationa way in which an individual could leave an organization that would not be part of one of the model's paths (Lee and Mitchell, 1999: p. 451)

Turnover Intent

33

2.4.6. Conclusion
After discussing five established models, there is an indication that none of the described models offered an adequate explanation for the turnover process. It has to be emphasized that due to the high complexity of the concept a general turnover process model still not exists. In spite of extensive studies on turnover in organization, there is yet no universally acknowledged framework for understanding why employees choose to leave (Lee and Mitchell, 1999). Although there is no standard model for understanding voluntary turnover process as a whole, a wide range of variables have been found useful when it comes to interpreting employee turnover. Therefore understanding the reasons for turnover intent can be also explained by outlining the impact of various factors, which are discussed in the following chapter.

Turnover Intent

34

3. Factors that have an Impact on Turnover Intent

Voluntary turnover is a complex process that includes several elements, which are illustrated in Figure 9. It is classified in three major causes. Firstly, price and convenience of the withdrawal plays an important role for employee turnover and separates social from financial aspects. The financial aspect may take many forms, such as wage, fringe benefits and other commodities that have financial value which organizations give to employees in return for their service. The social aspect refers to the social behavior of an employee within his organization, such as integration or relationship with other associates. Low perceived financial and social aspects in the own organization can lead to turnover. Secondly, the intensity of desire for withdrawal has an impact on turnover. Job satisfaction and job insecurity can be placed in this field. If an employee is dissatisfied or insecure with his job, then intensity of desire for withdrawal will be higher. Figure 9: A General Illustration of Turnover

(www.hrm.unizh.ch)

Turnover Intent

35

Last but not least, the attractiveness and availability of alternatives can influence employee turnovers. External factors, such as labor market or personal living circumstances, play decisive roles in the turnover process. This paper would like to address the issue of the specific impact of the determinants in the following chapter.

3.1. Determinants
The focus of this chapter would be to identify determinants causing turnover and to deduce hypothetical direction of action. Several variables will be categorized into three different groups; psychological, economic and demographical variables. This paper takes in account that some determinants may be interest of multiple categories. However, the purpose of the classification of the determinants into a category is to give a general view. According to Price (2001), economists and psychologists, who were predominantly involved in the turnover research, focused their interest on different variables. Psychological accounts emphasized the role of individual choice, whereas economic views are focused on the formative role of external influences such as external opportunities (Morrell et al., 2001). Nevertheless, this study adjusted the table with further factors, due to their relevance in the turnover process. Potential determinants, which are also captured in our data set HR Barometer 2007, are listed in Table 4. Table 4: Determinants for Voluntary Turnover Subdivided into Categories Psychological Determinants Psychological Contract Job Satisfaction Organizational Commitment Job Insecurity Economic Determinants Pay External Opportunity Training Company Size Demographic Determinants Age Tenure

Turnover Intent

36

3.1.1. Psychological determinants

Psychological determinants refer to the employees mental process and behavior, such as expectations, orientation, job satisfaction, organizational commitment, job involvement or affectivity. Conceptualizing turnover psychologically deals with factors that are influenced by employees emotions, attitude or perception (Mueller&Price, 1990: p. 322). The psychological school about turnover process concentrates more on the decision dimension to turnover. Some perspectives of the economist appear in the psychological model, but are usually conceptualized in other terms. For instance, while pay is one major dimension in the economic school, psychologists stress individual variations in expectations about pay, such as distributed justice or pay satisfaction. In contrast to economic dimensions, psychological view enables the effective management of turnover by offering potential on focusing their efforts on a key group of employees, or even on a single employee (Morrell et al., 2001: p. 32). The psychological school of turnover may be classed as voluntary, as they emphasize the role of individual choice, whereas economic accounts are more typically determinist, as they emphasize the formative role of external influences such as alternative opportunities(Morrell et al., 2001: p. 32). However, the psychological school often includes only those dimensions related to work issues and thus they neglect considering non-work factors as reasons for leaving work (Lee et al., 1996). Psychological determinants are listed below.

Psychological Contract
A psychological contract refers to an individuals beliefs regarding the terms and conditions of a reciprocal exchange agreement between that person and another party (Rousseau, 1989 in Farmer&Fedor, 1999: p. 350). The concept of the psychological contract is based on the insight, that the employees motivation and the level of their performance have to be maintained by the organization through incentives and rewards (Brinkmann&Stapf, 2005: p. 21-22). This give and take relation between organization and the employees is a complicated process about exchange and adjustment, and is made up of manifold and reciprocal expectations. The psychological contract contains all reciprocal yet unexpressed expectation, hopes and wishes of employees or

Turnover Intent

37

employers and is a not formulated supplementary agreement next to the lawful binding work contract. Some bipartisan matters concerning the psychological contract are listed in Table 5. Each lopsided accomplishment leads to disequilibrium of the psychological contract. Lopsidedness occurs when the company considers the employee only under the aspect of the organizational purpose and solely fulfills the obligation on the formal contract, such as wage payment. It signifies a negligence and contempt of individual motives of the employees and leads to insufficient dedication. Employees then tend to level their interest only on their wages. If the fulfillment of employees expectations, wishes and hopes fail to appear in the long run and the disadvantages are not equilibrate by advantages, then the employees inner conflict will get worse. If an employee is not able to bring about any changes, then work dissatisfaction will occur and then he will feel the break of the psychological contract. (Brinkmann&Stapf, 2005: p. 23) Table 5: Bipartisan Expectations Employee Comfortable and satisfying working conditions Possibility on exerting an influence on organizational matters Proper care, encouragement and support by the employer Protection from being overstrained and not being challenged Establish job safety Employer Classification and subordination of the employee under existing structures Unconditional loyalty Unrestricted workers availability (Brinkmann&Stapf, 2005: p. 22-23)

Turnover Intent

38

The foundation of the psychological contract is based on the social exchange theory, which assumes that the human behavior is controlled by individual utility maximization (Brinkmann&Stapf, 2005: p. 24). Humans strive to maximize benefits and minimize costs. Contract violations can trigger negative responses, such as lower the employees contributions, reduced satisfaction or turnover intentions (Farmer&Fedor, 1999: p. 352). H1: If the employee perceives the psychological contract as broken, then turnover intent will be higher.

Job Satisfaction
Job satisfaction is the pleasurable emotional state resulting from the appraisal of one's job as achieving or facilitating the achievement of one's job values (Locke, 1969: p. 316). Job satisfaction was conceived to be ones affective attachment to the job viewed either in its entirety (global satisfaction) or with regard to particular aspects such as leadership. It is conceptualized as an affective and emotional response. Satisfaction is defined as the degree to which employees have a positive affective orientation towards employment by the organization (Price, 1977: p. 79). Negative affective orientation towards the organization will emerge when employees are dissatisfied. The conformity, predictability and compatibility components of job satisfaction rather refer to the psychological school (Morrell et al., 2001: p. 34). Many studies showed empirical evidence that job satisfaction is an important predictor of future mobility (e.g. Mobley, 1977; Hom&Griffeth, 1991). H2: Job satisfaction decreases turnover intent. Job satisfaction is a complex construct composed of several facets which influence the employees mind. The literature commonly distinguishes various dimensions of satisfaction. It should be emphasized that this study views satisfaction not only as global emotional state, but also as a product of different determinants which are sampled in the given data set HRBarometer 2007.

Turnover Intent

39

Autonomy Autonomy is the quality or state of being self-governing. In this study the term autonomy is used to refer to jobs rather than to organization and refers to the control over work activities. Work autonomy is defined as the amount of discretion that an employee has in carrying out his work activities (Price, 1997: p. 456). Interdependence and work autonomy are often confused in studies. The degree to which a worker depends on group members in performing his job must be differentiate from the amount of power that an employee has relative to his job (Price 1997: p. 455). This study hypothesizes: H2a: Autonomy has a positive impact on job satisfaction. Pay satisfaction According to Lawler, pay satisfaction or dissatisfaction is a function of the discrepancy between what one feels one should receive and how much pay one does receive (Lum et al., 1998: p. 307). Several studies included pay satisfaction as a component of a multi-dimensional measure of job satisfaction (e.g. Frisina et al, 1988). Pay satisfaction causes include personal and job inputs, monetary and nonmonetary outcomes, the comparison process, as well as pay policies and administration. Models of pay satisfaction are based on the concept of Equity theory (Lum et al., 1988: p. 307) which emphasizes that pay satisfaction is caused by sentiments regarding the equity of a persons pay. These sentiments are influenced by the perceptual and comparative processes of the income/outcome ratio compared with a referent source, such as an associate. If the ratio is consistent with the other referent source, then pay satisfaction results. Inequitably feeling exists when someones pay is perceived to be less than anothers. Consequences of pay dissatisfaction contain several unwanted employee behaviors, such as turnover, absenteeism or lowered job performance. Pay satisfaction was examined to be negatively correlated with turnover intent, since it was positively correlated with job satisfaction (Lum et al, 1998: p. 308). H2b: Pay satisfaction has a positive impact on job satisfaction. Participation Employees should be able to have an influence over the decisions within the company. If decisions affect the staff, then employees are likely to view participation in order to obtain more

Turnover Intent

40

favorable decision outcomes. Compared to unfavorable decision outcomes without employees possibility to participate can create negative attitudes towards those, who were responsible for the outcomes (Magner, 1996). Participation can also be related to power particularly to centralization, which is the degree to which power is differently distributed within the organization (Price, 1997: p. 449). Thus the more power is distributed, the higher is the decentralization. One of the benefits of Participatory Management is that employees will be more contented, since they feel needed and wanted (Marrow, 1967). Therefore participation in organizational decision making or concerning an employees own work setting should have a positive impact on job satisfaction. H2c: Participation has positive impact on job satisfaction. Work flexibility Work flexibility negotiates with employee conditions involving adjustments in the timing, scope and/or place of work (Goldenhar, 2003). Two major characteristics are often discussed in studies (e.g. Hill et al., 2001). One is the so called Flextime, where employees have the possibility to choose their starting and ending hours. The other is Flexplace, where workers are able to do their work at a location by choice other than the regular workplace, such as the employees home (Goldenhar, 2003: p.3). In Hill et al.s paper (2001: p. 49) they argued that individuals better manage long work hours with unpredictable work loading, when they have the control over when and where to work. Benefits of work flexibility can be also seen in the level of employees job satisfaction. H2d: Work flexibility enhances job satisfaction. Job design Job design is defined as the organization of tasks and the structuring of jobs in a way that provides satisfaction for job holders and increases their effectiveness (www.gov.je). It compromises the specification of a work system related to a job and includes activities of job enrichment, job enlargement and job rotation. Several studies investigated job satisfaction as worker response to job design (e.g. Anderson, 1984) H2e: Job design increases job satisfaction.

Turnover Intent

41

Supervisory Support The relationship of supervisor support, also referred to as leadership, and job satisfaction is a paramount concern of several studies. A leader has to provide support or show consideration for employees concerning, otherwise a negative leader-employee interactions can result in lower pleasure with work, reduced productivity and motivation or absenteeism (Ribelin, 2003). Studies (e.g. Mobley et al., 1979) discussed the important role of the immediate supervisor in a turnover process. Supervisory support lowers turnover intent through its positive impact on job satisfaction (Price, 2001). H2f: Supervisory support has a positive influence on job satisfaction.

Organizational Commitment
Mowday and Steers defined commitment as the relative strength of an individuals identification with and involvement in a particular organization (1979, p. 226). It is characterized by three factors: a strong belief in and an acceptance of the organizations goals and values willingness to exert considerable effort on behalf of the organization and a strong desire to maintain membership in the organization Commitment can be seen as the loyalty to a social unit, such as organization, the subsystem of an organization or an occupation (Price, 1997: p. 335). Most research on commitment concentrates on organizations rather than subsystems or occupation. Organizational commitment refers to the employees psychological attachment to the organization. Meyer and Allen conceptualized commitment in terms of three distinct psychological states which influence whether the employees remain or leave the organization (Lee et al., 2001: p. 597): affective commitment: emotional attachment to the organization continuance commitment: recognition of the cost associated with leaving the organization normative commitment: perceived obligation to remain with the organization

Turnover Intent

42

Most of the studies argued that affective commitment emerged as the most consistent precursor of turnover intent (e.g. Sommers 1995). Yet it should be noticed that an employee can be simultaneously affectively, continuously and normatively committed to the organization. Some traditional studies argued that organizational commitment develops from job satisfaction (e.g. Price&Mueller, 1981) and concluded that commitment takes longer to develop and thus is more stable than job satisfaction. However, recent studies (e.g. Currivan, 1999) showed that no significant relationship between organizational commitment and job satisfaction exists. H3: Organizational Commitment lowers the turnover intent.

Job Insecurity
Hesselink et al. defined job insecurity as a personal concern about the continuity of the job (Hesselink et al., 1999: p. 275). Employees can feel insecure even though no reasons for it exist. However, job insecurity is more known concerning the future-uncertainty about a future job development and its possible discontinuity. Hesselink et al. (1999) argued that there are two dimensions that can cause job insecurity: the perceived probability and the perceived severity. They stated that the more likely it is that a person will lose his or her job and/or the more severe the consequences of the loss are, the stronger his or her feelings of job insecurity will be (Hesselink et al., 1999: p. 275). Job insecurity resulted to be related to decreased work effort, resistance to change and intention to job mobility, hence adversely impact organizational effectiveness (Greenhalgh & Rosenblatt, 1984). The positive correlation between job insecurity and turnover intent is to be expected. Individuals who worried about continuity of employment are likely to seek more secure jobs. H4: Job Insecurity increases turnover intent.

3.1.2. Economic determinants

Economists view the employees decision, whether he wants to leave or stay, as a result of a rational cost-benefit assessment (Mueller&Price, 1990: p. 321). When rewards to costs ratio of staying with an organization are equal to the ratio at another place of employment, the employee will decide not to leave the current organization. Economic view analyzes the turnover process with more emphasis on the interplay between externally determined variables such as pay or

Turnover Intent

43

opportunity (Morrell et al., 2001: p. 21). However, a criticism of the sole economic perspective might be that it fails to capture the complexity of the process of turnover within an individual firm (Morrell et al., 2001: p. 33). Simply economic analysis of turnover may also create solutions that are inoperable. For instance, the firm may be not able to modify pay or influence the labor market factors (Morell et al., 2001: p. 33). This study will discuss some important economic variables, which are illustrated in the data set.

Pay
Pay is one major component for economists. The dominant proposition which is subject to the economic model is that high pay in their present employment will reduce turnover. According to Mueller and Price (1990: p. 321), pay is considered as a part of the sanctions system used by the organization to motivate employees to be in compliance with its regulations and rules. The wage payment plays an important role in their current as well as in possible future employment. The lower the salary is in his existent organization, the more an employer will aim to change this situation. Furthermore it is to assume, that better paid employees within the same hierarchy level tend to stay in the organization (Henneberger&Sousa-Poza, 2007: p. 61). However, there are well-established literatures concerning motivation (e.g. McGregor 1957) suggesting that for at least some individuals, pay is not the sole motivating factor. It is told that motivation has some link with job choice and that pay will not be the sole criterion used when people decide to choose a job, or when they decide to continue within an existing job. H5: High pay has no significant effect on turnover intent behavior.

External Opportunity
External Opportunity refers to the availability of alternative, attractiveness and attainability of employment in the environment. The interaction of supply and demand forces in the economy must be taken into consideration in measuring external opportunity. The availability is mainly about the number of opportunities outside the organization. The attractiveness refers to the pay levels of such opportunities. Last but not least, attainability is defined by the possession of the skills required on the job (Mueller&Price, 1990: p. 321). Thus numerous higher paid jobs for which a worker is qualified should produce a greater turnover.

Turnover Intent

44

H6: High perceived external opportunity produce greater turnover intent.

Training
The training dimension is relevant for the turnover process and is related to pay and job market components. Many employees increase their productivity by adding new skills to their knowledge and perfecting old ones while on the job (Forrier&Sels, 2003: p. 151). Thus the relationship between training and turnover intent can be traced back to the Human Capital theory, arguing that the investment on training can increase the quality of an employee (Becker, 1993). This study did not consider distinguishing between the two different types of training, such as general or specific training. However, the amount of training days can indicate the effort of the company to invest in their employees with the intentions to retain them. Therefore this study hypothesizes: H7: High amount on training will reduce turnover intent.

Company Size
During the recession phase in the mid-nineties, smaller organizations were confronted with higher turnover rate, whereas bigger organizations were able to keep their employees (Henneberger&Sousa-Poza, 2002: p. 17). Many people assume that bigger companies pay a higher salary, have more existing promotion opportunity (internal vertical and horizontal mobility) and offer a higher job safety than smaller companies (Henneberger Sousa-Poza, 2002: p. 17). Therefore an inverse relationship between company size and turnover intent exist H8: Bigger companies feature lower turnover intent.

3.1.3. Demographic determinants

Demographic variables, also known as personal characteristics, are widely used in turnover research. These variables are seen as social categories for an individual (Price, 1995). Two determinants were examined to have a direct impact on turnover intent, such as tenure and age.

Turnover Intent

45

Tenure
Many studies included tenure in demographical predictors of turnover (e.g. Cotton and Tuttle, 1986/ Price, 1977/ Hom&Griffeth, 1991). These studies discussed the relationship of turnover and tenure. Tenure reflects specific human capital investments, learning about job characteristics that can modify the positions attractiveness, as well as periodic labor force attachments (Viscusi, 1980: p. 394). Individuals with a higher rate of length of service, who leave the organization, are likely to be found disproportionately from among the members with low lengths of service. Increased tenure shows to be strongly related to propensity to remain. H9: If the amount of tenure is high, then turnover intent will be low.

Age
The factor age has been resulted to be negatively correlated with the probability of job turnover intent (e.g. Henneberger&Souza-Poza, 2007). Based on the matching theory, younger people have an experimental stage at the beginning of their professional life. A change is less attractive, since the available time to redeem the costs associated with a job turnover diminishes with age. H10: Turnover intent decreases with increasing age.

3.2. Moderators
After having listed various important determinants in the former chapter, it is now important to propose the effects of moderators in the turnover process. According to Baron and Kenny, a moderator is defined as a qualitative (e.g., sex, race, class) or quantitative (e.g. level of reward) variable that affects the direction and/or strength of the relation between an independent or predictor variable and a dependent or criterion variable (Baron&Kenny, 1986: p. 1174). The two presented moderators, gender and education, are categorized as demographic variables (e.g. Price, 1995). Studies revealed their effects as moderators in the turnover process (e.g. Royalty, 1998).

Turnover Intent

46

3.2.1. Gender
Various studies examined the effect of gender on job mobility. The central question was if women have a weaker attachment to their job and to the labor market than men. Since most of the studies showed no apparent difference in job mobility by gender, searching for the main effect of gender on turnover intent is senseless. A traditional view associated women with childbearing or with secondary earners in the household (e.g. Royalty, 1998). These historical views have had more reasons for leaving the job than men (e.g. follow a spouses career moves). Therefore it can be assumed that the relationship between organizational commitment and turnover intent is moderated by gender. Thus this study hypothesizes: H11: Organizational commitment will have more impact on male turnover intent than on female turnover intent. It has been investigated that differences exist concerning job satisfaction and gender. One may assume that women tend to be more satisfied than men (Souza-Poza, 2007: p. 896). Different social-psychological studies (e.g. Crosby, 1982; Mueller&Wallance, 1996) show organizational and job satisfaction to be equal between women and men. Economic studies however (e.g. Clark, 1997; Souza-Poza, 2007) concluded that due to the lower expectations of women about their careers, they seem to have a higher job satisfaction on identical jobs than men, which generally reduces job turnover inclination. H12: The job satisfaction-turnover intent is stronger for female employees.

3.2.2. Education
Education is an important variable in Human Capital theory, which proclaimed that education is an investment in human capital (Becker, 1993). It showed that productivity gains with education. It is often assumed that the level of education has a positive effect on the probability of job mobility since a high education is often associated with better labor-market alternatives (e.g., Royalty, 1998). However, most examinations did not reveal a significant direct impact on turnover intent (e.g. Campbell, 1997).

Turnover Intent

47

Based on the Matching theory, Henneberger and Sousa-Poza (2002: p. 28) argued that younger employees tend to change their employment more often, since they are experiencing an experimental phase at the beginning of their professional life. Since high educated employees supposedly have better labor market alternatives (e.g. Royalty, 1998), this study hypothesize the following. H13: Younger high educated employees tend to have a higher turnover. Royalty examined turnover by gender and educational level (1998). She found out that differences in gender turnover are due to the behavior of less educated women. Less educated women vary significantly in their turnover behavior from both groups of men and from more highly educated women. Women with higher education do not significantly differ from less or more educated men in their turnover behavior. H14: Less educated women are more likely to have higher turnover intent then men.

Turnover Intent

48

4. Methodology
4.1. Procedure
For the evaluation of the listed impacts of determinants and moderators on turnover intent, an empirical analysis is needed. The yearly survey HR-Barometer 2007 will provide the data set for this study. At first, a small description about the data set will be given, followed by an overview about the participants as well as their turnover intent in the survey. Factors that have an impact on turnover intent will then be analyzed with regression models and analysis of variance.

4.2. Data set: HR-Barometer 2007

The determinants chosen to include into study were selected from those available in the data base HR-Barometer 2007. To evaluate the contentions mentioned in chapter 3, it is important to have a data set that is more focused on the Human Side of Enterprise. HR-Barometer is a survey made by the University and ETH Zurich. It is an annual repeated sampling about the labor situation of employees in Switzerland and measures the current business temperature. The detailed and statistical analysis revealed current trends in Human Resource Management as well as important effects on employees and organizations. Based on the results of this data set, different decision guidance and proposals can be deduced and it allows comprehending the change management. This established instrument will be taken over for this study. The data set is based on telephone surveys conducted in Switzerland. Names and telephone numbers, which were randomly selected, were provided from the Swiss Federal Statistical Office. The questionnaire is composed of closed questions with predetermined response options. People between 16 and 65 years old, who were at that time forty percent or more employed, were allowed to participate. Respondents were neither self-employed nor proprietor of a business. Surveying by telephone is recommended when your desired sample consists of the general population. The scope of reach possible with telephone surveys is vast.

4.3. Participants
Participants were inhabitants of Switzerland. In total, 1366 people participated, whereas 1007 of them from the German-speaking and 363 from the French-speaking part of Switzerland. Their

Turnover Intent

49

mean age was 44.26 years (sd= 10.30) and their average tenure was 10.24 years (sd = 9.35). The distribution of the participants sex was almost equal, that is 55 % male and 45% female. The share of University or college of higher education graduates represents approximately 34%, and 61% was the share of apprenticeship, vocational school and Matura. 14% of the participants work in a micro business, 48% in SME and 38% in a large-scale enterprise. 64% of the participants had an employment without supervisor function. It also showed a representative distribution by industry. Figure 10 depicts that about 30% of the respondents were rather likely or even very likely to have intentions to leave. Disaggregated by industry, it shows that health and social care features the highest amount on turnover intent, whereas agriculture and forestry industry have the lowest (see Figure 11). Figure 10: Turnover Intent Response-HR Barometer 2007

Turnover Intent

50

Figure 11: Turnover Intent by Industry HR-Barometer 2007

Turnover Intent

51

5. Results
In this section we discuss whether our listed hypotheses were supported by the survey data. Regression analyses were separately conducted for psychological, economic and demographic determinants. Significant coefficients were then integrated in one model to see whether determinants change their significance. In this study moderation of the form of a relationship is detected by looking for interaction effects in analyses of variance (ANOVA) or significant regression coefficients for interaction terms.

5.1.

Statistical Analysis

To characterize the degree of linear relationship between the formulated determinants and turnover intent, it is important to understand the different dimensions of the regression model. The goodness of fit of the regression model can be measured with the multiple correlation coefficient (R2). Therefore an R2 of 1.0 (100%) indicates a perfect fit. It describes the overall proportion of variance in the criterion that can be explained by the linear regression equation. Statistical significance is tested with the F-test for the overall fit, followed by the t-test and the pvalues for individual parameters significances. Beta coefficients show absolute change of dependent variable weight if dependent variable size changes one unit. The standardized regression coefficients allow comparing the strength of each predictor. Their relative absolute magnitudes reflect their relative importance in predicting weight. The level of statistical significance is being applied at =5%.

5.1.1. Psychological Determinants of Turnover intent

A linear regression analysis provides an understanding for the relationship between the different psychological determinants and turnover intent. The regression equation is: Turnover intent= + 1*Psychological Contract + 2*Job satisfaction + 3*Organizational Commitment + 4* Job insecurity Table 6 shows the results of the regression analysis for the effect of psychological determinants and turnover intent. The overall fit was significant. All variables showed highly significant effects on turnover intent. Each of the predicted variables had highly significant (p < 0.001)

Turnover Intent

52

impacts on turnover intent. Job satisfaction indicates the highest impact followed by Organizational Commitment, Job Insecurity and Psychological contract. The regression analysis supported H1, H2, H3 and H4. The R shows an acceptable fit of the model. Table 6: Regression Psychological Determinants of Turnover Intent Coefficients () Constant Psychological Contract Job Satisfaction Organizational Commitment Job Insecurity Coefficient of Determination 3.284 -0.139 -0.150 -0.149 0.098 R=.260 Std. Error 0.137 0.036 0.015 0.023 0.023 -0.103 -0.286 -0.176 0.107 Standardized Coefficients

t-Value 23.908 -3.831 -9.911 -6.443 4.270

p-Value 0.000 0.000 0.000 0.000 0.000

Since Job Satisfaction showed the highest -coefficient, it is therefore interesting to examine which determinants have an impact on job satisfaction. It has to be emphasized that the regression equation of Job Satisfaction is adapted from HR-Barometer 2007. Job Satisfaction = + 1*Autonomy + 2*Pay Satisfaction + 3*Participation + 4* Work flexibility+ 5*Job Design Table 7 shows the results of the regression analysis for the effect of the different independent variables on job satisfaction. The overall fit was significant. All variables showed highly significant effects on job satisfaction. Each of the predicted variables had highly significant impacts on job satisfaction (p 0.001). According to the regression model, job design showed the highest effect on job satisfaction, closely followed by pay satisfaction, and then autonomy and supervisor support. The hypotheses H2a, H2b, H2c, H2e and H2f are accepted. Work flexibility resulted unexpected results. Even though, a bivariate correlation test revealed a positive correlation between work flexibility and job satisfaction, it indicated a negative

Turnover Intent

53

relationship with job satisfaction in the regression model, = -0.086, t=-3.649, p<0.001. Therefore hypothesis H2d is rejected. The R shows an acceptable fit of the model. Table 7: Regression Determinants of Job Satisfaction Coefficients () 1.134 0.053 0.556 0.220 -0.147 0.803 0.044 R=.334 Std. Error 0.250 0.012 0.055 0.063 0.040 0.071 0.012 0.116 0.252 0.097 -0.086 0.293 0.093 Standardized Coefficients

Variables Constant Autonomy Pay Satisfaction Participation Work Flexibility Job Design Supervisory Support Coefficient of Determination

t-Value 4.531 4.457 10.044 3.486 -3.649 11.359 3.776

p-Value 0.000 0.000 0.000 0.001 0.000 0.000 0.000

5.1.2. Economic Determinants of Turnover intent

The regression equation with economic determinants as independent variables and turnover intent as dependent variable is written below. Turnover intent= + 1*Pay + 2*External Opportunities + 3*Training + 4* Company Size Table 8 features the results of the regression analysis for the effect of economic determinants and turnover intent. The overall fit was significant. In contrast to psychological determinants not all predicted variables showed significant impacts on turnover intent. As expected pay, had no significant effect on turnover intent, =-0.022, t=-1.18, p=0.238. It supported the hypothesis H5. The determinants External opportunities and Training was significantly related with turnover intent and also supported the hypotheses H6 and H7. The hypothesis H8 was rejected, showing that company size is positively and not negatively related to turnover intent. However, the R indicated a poor fit of the model, which makes the results ominous.

Turnover Intent

54

Table 8: Regression Economic Determinants of Turnover Intent Coefficients () 1.747 -0.022 0.024 -0.007 0.048 R=.017 Std. Error 0.109 0.019 0.007 0.002 0.023 -0.034 0.089 -0.088 0.060 Standardized Coefficients

Variables Constant Pay External Opportunities Training Company Size Coefficient of Determination

t-Value 15.175 -1.180 3.207 -3.176 2.129

p-Value 0.000 0.238 0.001 0.002 0.033

5.1.3. Demographic Determinants of Turnover intent

The regression equation of demographic determinants consists of two independent variables: Turnover intent= + 1*Tenure+ 2*Age Table 9 shows that both tenure and age had significant impacts on turnover intent. The overall fit was significant. Tenure was significant =-.009, t=-2.955, p=.003, whereas age was highly significant, =-0.011, t=-4.149, p>0.001. The analysis supported the hypotheses H9 and H10. However, it also revealed a low R, which indicated a poor fit of the model. Table 9: Regression Demographical Determinants of Turnover Intent Coefficients () 2.485 -0.009 -0.011 R=.037 Std. Error 0.106 0.003 0.003 -0.092 -0.129 Standardized Coefficients

Variables Constant Tenure Age Coefficient of Determination

t-Value 23.391 -2.955 -4.149

p-Value 0.000 0.003 0.000

Turnover Intent

55

5.1.4. Integrated Model of Turnover

So far psychological, economical and demographical determinants were examined separately. After testing the significance of various listed determinants on turnover intent it is also important to know how relation can vary when integrating all determinants in one model. It should be emphasized that only significant determinants are included in the regression equation. Turnover intent = + 1*Psychological Contract + 2*Job satisfaction + 3*Organizational Commitment + 4* Job insecurity + 5*External Environment + 6*Training + 7*Company Size + 8* Tenure+ 9*Age Table 10 features the results for the integrated model. The overall fit was significant. Psychological determinants remained highly significant (p < 0.001), supporting the hypotheses H1, H2, H3 and H4. Furthermore, job satisfaction resulted to have the highest impact on turnover intent. Economic determinants changed their significance. External opportunities became highly significant and supported the hypothesis H6. Training and company size lost significance, therefore in an integrated model H7 and H8 has been rejected. The demographic determinant tenure hypothesis H9 was rejected and age went from highly to significant and still supported H10. The R shows an acceptable fit of the model. Table 10: Regression Integrated Model of Turnover Intent Variables Constant Psychological Contract Job Satisfaction Organizational Commitment Job Insecurity External Opportunities Training Company Size Tenure Age Coefficient of Determination Coefficients () 3.317 -0.155 -0.148 -0.141 0.106 0.026 -0.004 -0.007 -0.003 -0.007 R=.295 Std. Error 0.214 0.036 0.015 0.024 0.023 0.007 0.002 0.019 0.003 0.002 -0.114 -0.283 -0.169 0.115 0.099 -0.044 -0.009 -0.030 -0.082 Standardized Coefficients t-Value 15.493 -4.260 -9.764 -5.980 4.538 3.675 -1.884 -0.361 -1.048 -2.842 p-Value 0.000 0.000 0.000 0.000 0.000 0.000 0.060 0.718 0.295 0.005

Turnover Intent

56

5.1.5. Moderators
The statistical analysis needs to examine the differential effect of the independent variable on the dependent variable as a function of the moderator. For appropriately measuring and examining the moderating hypotheses we have to consider specific analysis procedures. To examine the significance of the moderator variables, we need to look for interaction effects. This can be measured with a regression analysis or ANOVA (Baron&Kenny, 1986). The proper statistical test depends on the nature of the variables. The product term needs to be significant in the regression equation or in the ANOVA model in order to interpret if an interaction effect exists. A 2 X 2 ANOVA revealed a main effect of Organizational commitment on turnover intent, which was highly significant; F (26.1326) = 9.937, p < 0.001. It did not indicate a significant main effect of Gender; F (1.1326) =.458, p=.499. In addition, the interaction Organizational Commitment X Gender was also not significant, F (12.1326) = 1.650, p=0.072. The hypothesis H11 was rejected. However, the illustration of this relationship (see Figure 12) showed some outliners, which could have influence the deteriorating results. This issue need to be address in a future study. Figure 12: Gender Effect on the Relationship between Commitment and Turnover intent

Turnover Intent

57

A 2 X 2 ANOVA revealed a main effect of job satisfaction on Turnover Intent, which was highly significant; F (10.1345) = 37.368, p < 0.001. It did not indicate a significant main effect of gender F (1.1345) =1.572, p=0.210. The interaction Job Satisfaction X Gender was not significant either F (9.1345) =.885, p=0.538. Thus it rejected the hypothesis H12. Figure 13: Gender Effect on the Relationship between Job Satisfaction and Turnover intent

A regression analysis was used to test the hypotheses, since both variables are implemented in ordinal measurement. The overall fit of the model was significant. Table 11 shows the detailed analysis. The product term Age X Education was not significant, = -0.002, t=1.167, p=0.244 and therefore rejected the hypothesis H13. However, it also revealed a low R, which indicated a poor fit of the model.

Turnover Intent

58

Table 11: Regression Moderator Education-Age-Turnover Intent Coefficients () 2.651 -0.020 -0.029 -0.002 R=.038 Std. Error 0.231 0.005 0.063 -0.001 -0.236 -0.055 0.150 Standardized Coefficients

Variables Constant Age Education Age*Education Coefficient of Determination

t-Value 11.457 -3.930 -0.465 1.167

p-Value 0.000 0.000 0.642 0.244

A 2 X 2 ANOVA revealed a main effect of Education on Turnover Intent, which was significant; F (5.1351) = 2.908, p=.013. It did not result a significant main effect of Gender F(1.1351) =.356, p=.551. The interaction Education X Gender was also not significant, F (5.1351) = 0.535, p=0.750. The hypothesis H14 was rejected. Figure 14: Moderator Education-Gender-Turnover Intent

Turnover Intent

59

5.2.

Discussion

The current study was designed to examine several factors that have an impact on turnover intent using different statistical methods, such as linear regression or ANOVA. The analysis showed interesting results, drawing a conclusion about the relative importance of psychological, economic and demographic determinants as well as the moderating variables. The psychological model indicated that the included determinants had a high impact on turnover intent. The psychological contract showed that the more an employee perceives his contract as being fulfilled, the less he would intend to leave. The results support the idea that a psychological contract is important in the turnover behavior. Psychological contracts are based on trust. Thus, if contract expectations are violated, trust and faith in the relationship are broken, consequently the employees inner conflict will get bigger and turnover intent will occur. Job satisfaction displayed the highest relationship, which confirmed early studies (e.g. Mobley, 1977; Henneberger&Sousa-Poza, 2007), arguing that dissatisfied employees with their work are most likely to leave. The sum-of-facets measures of job satisfaction were analyzed in a separate model, indicating that all included factors were all significant. According to the findings, job design seems to have the highest relationship with job satisfaction. Supervisory support and autonomy showed the weakest correlations. However, the factor work flexibility surprisingly revealed to have a negative impact on job satisfaction in the regression model, although it resulted to have a positive correlation with job satisfaction. This contradiction needs to be examined. Concerns about the equivalence of global and sum-of-facets measures of overall satisfaction have been raised. Sum-of-facets measures can miss important factors of overall satisfaction out, that is considered implicitly by global measures or include satisfaction facets that are irrelevant to a person (Tett&Meyer, 1993: p. 263). Since the variables in the model are based on the dataset HR Barometer 2007, it is possible that some other important components of job satisfaction are not included. The negative relationship between organizational commitment and turnover intent was also confirmed in this study. It appears that the more an employee feels committed to the organization, the less he intends to leave. It has to be emphasized that the items in the survey regarding organizational commitment reflect more affective commitment rather than continuance or normative commitment. Job insecurity resulted to have a positive

Turnover Intent

60

relationship to turnover intent. It supported the hypothesis that the more job insecurity an employee perceives, the more he would intend to quit. The economic model revealed the expected results. One important concern of economics school was pay. The results of the analysis confirmed the hypothesis that pay plays no important role in the turnover decision process. It emphasized once more that nowadays employees rather prefer jobs with an interesting job design than high wages. External opportunities had a positive effect on turnover intent. The more employees perceive their alternatives outside the organization to be high the more likely the intent to leave. A greater employee awareness of alternative jobs in the environment allows them to evaluate their current jobs (Mueller&Price, 1990). A high investment in training resulted to have a negative impact on turnover intent. Turnover intent decreased with the amount of training days. Company size revealed to be marginal positive significant. The more an organization features a high number of employees, the more employees are intending to leave. Therefore it disagreed with the hypothesis in this study, assuming that employees prefer organization with high amount of personnel. Apart from the several significances of the determinants revealed in this analysis, it should be emphasized that the very low R, which measures the goodness of the fit is ominous. Thus the utility of the model has to be questioned. The demographic model was the less extensive model including two determinants. Age revealed to have a negative relationship to turnover intent, indicating that the older an employee gets the less he intends to leave. Tenure also showed to be significantly correlated with the dependent variable. The longer an individual is employed, the less he will have intentions to leave. However, this model also features a very low goodness of fit, so that the utility of the model also needs to be discussed. The integrated model included significant determinants of psychological, economic and demographic determinants. All psychological determinants, from psychological contract to job insecurity remained highly significant. Once more, job satisfaction was shown to have the highest impact on turnover intent in the integrated model. Economic determinants changed their importance. Only external opportunities still appeared to be important in the turnover intent decision. Training had no significant impact on turnover intent in this model. This paper assumes that the amount of training is not sufficient to bring out the relevant relationship between training

Turnover Intent

61

and turnover intent. Company size showed no significant effect on turnover intent, indicating that the size of an organization does not have an important role in the turnover behavior. The demographic determinant age still resulted to be significant, whereas tenure showed to have no significant relationship to turnover intent when integrating all determinants in one model. The moderating findings showed no significant effects. Gender did not moderate the effect between organizational commitment and turnover intent. The relationship was not stronger for male employees. The effect of job satisfaction on the dependent variable was not moderated by gender. The assertion that women tend to be more satisfied at work than men was refuted. The interaction effect of gender and education on intentions to leave revealed to be not significant. Less educated women do not differ in their turnover behavior from men. Education did not moderate the effect of age on turnover intent, thus young higher educated employees are not more likely to have higher intent to leave. However, it showed also a low fit of the model. According to the empirical findings, psychological determinants showed to have the strongest effect on turnover intent. The low R of the economic and demographic analysis pointed out that the utility of the models are ominous. The integrated model indicated the same results on psychological determinants; however some economic and demographic variables change their significance, which can be traced back to the inadequate models. Concerning the moderators, none of the four analyses revealed significant effects.

Turnover Intent

62

6. Summary
6.1. Research results

One purpose of this study is to understand the phenomenon turnover intent by examining several theories and models describing and explaining reasons for turnover behavior. At first, different theoretical concepts were presented that indicate an explanation for the occurrence of turnover. According to the Social-Exchange theory, turnover intent will emerge as soon as the costs outweigh the benefits, thus the employee perceives an unfair exchange process. Human capital theory explains why company specific training has an inverse relationship to turnover intent. The higher the investments are on specific knowledge, the higher the considered transaction costs will be and thus turnover intent will be less attractive. Search and matching theories describe an inverse correlation between tenure and the dependent variable by assuming that at the beginning of a job search process, people have different expectations, which can be evaluated once the individual starts his employment. If the current job does not match with the employees expectations, then thoughts about quitting may arise. The evaluation usually happens at an early stage of the employment. The Equity theory proposes that employees determine whether the fair balance between inputs (e.g. hard work) and outputs (e.g. wages) exist. If an employee perceives the distribution of resources as unfair, then turnover intent will emerge. Organizational equilibrium theory discusses how organizations are dependent on the continuity of participants contributions and in order to maintain this situation, organizations have to offer equitable inducements, otherwise turnover intent can turn to an issue. Five key models that are rather derived from the psychological school were illustrated, described and critiqued. While some of the presented models had shaped the turnover research over the past decades, none of them offers a universally acceptable model for understanding and interpreting the turnover process as a whole (Lee and Mitchell, 1999). The unfolding model by Lee and Mitchell (1994) offers an alternative perspective; however, it includes many unclassifiable routes that still need to be examined, showing that there is a need for a new model. The second purpose of this study is to conduct an empirical derivation of the factors that have an impact on turnover intent of Swiss employees based on HR Barometer 2007. A wide range of factors have been found useful, which were discussed in the various theories and models, when it

Turnover Intent

63

came to interpret the turnover behavior. They were categorized into psychological, economical or demographical determinants and moderators. The different categories were first separately analyzed. Significant determinants in each group were then integrated into one model. It resulted that psychological dimensions featured highly significant impacts on turnover intent and it also turned out that they had the strongest coefficients. Job satisfaction showed the highest significant coefficients, whereas age featured the lowest significant coefficient. However, the weak results of some economic and demographical determinants may be explained by the low R-squared, which indicated a bad fit of the models. All four moderating hypotheses were rejected.

6.2.

Limitations

Limitations refer to the empirical examination in this study. The HR Barometer 2007 is an established survey that measures various labor situations of Swiss employees. Turnover intent was not the main focus of this questionnaire, thus this initial position implicated several restrictions. The construct validity has to be discussed. This validity has to do with the precision of the constructs, such as the setting of the data set, and whether the constructs were correctly operationalized. Factors that have been examined about their impact on turnover intent were based on the given data set. However, the complexity of a turnover intent issue includes further intervening variables, which were not included or were not approximately measured in the survey. The particular operationalization of a turnover intent construct in this study was not adequately measured. External validity relates to a generalization of the findings from a sample to a population, to other subject populations, to other settings or to other time periods. The empirical examination can be generalized for Swiss employees. However, considering it to be valid generally, which is to all cultures, has to be questioned.

6.3.

Future Research

Several theories and models have been found to be useful for a better understanding of the turnover behavior. However, particularly established models failed to explain the phenomenon as a whole. They have not been wholly satisfactory in predicting turnover, thus a reconceptualization of the models seems to be in order.

Turnover Intent

64

Further testing might include a re-examination of the factor structure of the model or adding other factors that have been found to be important in predicting turnover intent. The data set of HR Barometer 2007 surveyed the Human Side of Enterprise as a whole, thus turnover intent was not the main focus of the questionnaire. Consequently important factors that have an impact on turnover intent were not included. These and other issues remained to be addressed to clarify the understanding of the turnover behavior. Below you will find several factors that can be included for another survey. The importance of the relationship between performance and turnover were explored in several studies (e.g. Allen&Griffeth, 2001). Retaining high performers is a big issue for an organization, since it can be devastating for organizational efficiency (Tziner&Birati, 1996). In contrast, if poor performers leave the organization, this can be beneficial in some circumstances. However, the relationship between job performance and turnover intent remains unclear. Some studies argued that performance-turnover relationship is more likely to be negative, since they assumed that high performers receive greater rewards and therefore have less desire to leave (e.g. Price&Mueller, 1981). Yet other studies showed a positive relationship between the two variables, arguing that higher performers are supposable to have more alternative job opportunities and thus are more likely to be able to change their jobs (e.g. Lance, 1988). The relationship performance-turnover can be traced back to the theory of March and Simon in 1958 (see Chapter 2.1.) about the desirability and ease of movement emphasizing the effects of performance on satisfaction and those emphasizing the effects of performance on alternatives representing competing perspectives (Allen&Griffeth, 2001). Thus the main effect and moderating effect of performance on turnover intent has to be examined and has to be categorized as an economic factor. Marital status, also called kinship responsibilities, has to be considered in the turnover process as a potentially significant demographic determinant. The cost of a job change increases when the whole family is involved. It resulted that married employees typically are found to be less likely to quit than unmarried people (e.g. Cotton&Tuttle, 1996; Hom&Griffeth, 1991). The existence of children in school age can also have a negative impact on job mobility (Henneberger&SousaPoza, 2002: p. 34). The following intervening sequence appears reasonable: Having a family produces some obligations and these obligations are most easily fulfilled by remaining with the

Turnover Intent

65

current employer, thus turnover may be less attractive. Furthermore, younger and unmarried men feature a high turnover rate (Hennbergerger&Sousa-Poza, 2007: p. 18). Structural variables associated with the work environment need to be included and can be categorized in social-psychological factors. Frequently discussed in literature is the dimension social support which is defined as the degree of consideration individuals receive from their members of their social network (Iverson, 1999: p. 402). One type of social support is supervisory support and was examined in this study. The second type is the co-worker or peer support and still needs to be included in a future study. Peer support is one concern in sociology and it discusses issues about integration, work group cohesion, social capital and primary groups (Price, 2001: 607). Peer support is expected to lower turnover intent by a positive impact on job satisfaction. Although training was examined in this study resulting to have a negative relationship to turnover intent, it is also important to distinguish between specific and general training. According to Becker (1993), perfectly general training requires training to raise an employees marginal product equally at all firms. General training is usually not paid by the employer and makes the employee easily replaceable, but on the other hand makes them more attractive for other organizations (Henneberger&Sousa-Poza, 2007: p. 53). General training can increase turnover intentions. Specific training is defined as a training that has no effect on the productivity of trainees that would be useful in other firms (Becker, 1993: p. 40). Turnover becomes more important when costs are imposed on employees or organizations, which are the effects of specific training. Important in this study is the consequence of turnover for an employee. The investment on a specific training is more likely to be protected by the organization, for instance by giving the employee a higher wage, since the costs are often borne by the organization (Henneberger&Sousa-Poza, 2007: p. 54). Thus specific training, as an economic determinant, decreases turnover intentions. A negative correlation between unemployment and turnover intent is to be assumed. Increasing unemployment rate deteriorate generally alteration options, due to the decreasing probability of offers for better jobs (Henneberger&Sousa-Poza, 2002: p. 32). Unemployment needs to be categorized as an economic variable. The development of unemployment and turnover rates over time can reveal interesting findings.

Turnover Intent

66

Career commitment has to be examined to have a moderating role on the relationship of affective commitment and turnover intent. Employees that are committed to the company are less likely to leave, and the degree is stronger for those highly committed to their careers (Chang, 1999: p. 1260).

6.4.

Conclusion

Understanding turnover intent is important because when employees choose to leave, there are multiple direct and indirect costs and other consequences on organizational efficiency. Greater comprehension of turnover intent can allow for targeted intervention. Several theoretical concepts were presented explaining the occurrence of turnover intent. After discussing and criticizing established turnover models there is an indication that a need of a new model exists. According to the empirical investigation in this study, psychological determinants, such as psychological contract or job satisfactions, seem to have the strongest impact on turnover intent. Economic and demographic determinants as well as moderating variables provided weak empirical foundation, thus conclusive statements about their influence on turnover intent cannot be made. This study revealed once more the complexity of the turnover behavior and indicated that there are still improvement opportunities for future studies in order to specifically understand this phenomenon.

Turnover Intent

67

7. References
Allen, D. & Griffeth, R. (2001). Test of a Mediated PerformanceTurnover Relationship Highlighting the Moderating Roles of Visibility and Reward Contingency. Journal of Applied Psychology 86, 1014-1021. Anderson, C. (1984). Job Design: Employee Satisfaction and Performance in Retail Stores. Journal of Small Business Management 22, 9-16. Barak, M., Nissly, J. & Levin, A. (2001). Antecedents to Retention and Turnover among Child Welfare, Social Work, and Other Human Service Employees: What Can We Learn from Past Research? A Review and Metanalysis. Social Service Review 75, 625-661. Baron ,R. & Kenny, D (1986). The Moderator-Mediator Variable Distinction in Social Psychological Research: Conceptual, Strategic, and Statistical Considerations. Journal of Personality and Social Psychology 51, 1173-1182. Barnard, C. I. (1938). The Functions of the Executive, Harvard University Press, Mass. Becker, G. (1993). Human Capital: A Theoretical and Empirical Analysis, with special reference to Education. Chicago and London, 3rd Edition: The University of Chicago Press. Berndt, T. (1981). Effects of Friendship on Prosocial Intentions and Behavior. Child Development 52, 636-643. Bowen, D.& Siehl, C. (1997). The Future of Human Resource Management: March and Simon (1958). Human Resource Management 36, 57-63. Breaugh, J.A. (1985). The Measurement of Work Autonomy. Human Relations. 38, 551-570. Brinkmann, R. (2005). Innere Kuendigung-Wenn der Job zur Fassade wird. Muenchen: C.H. Beck. Campbell, C.M., (1997). The Determinants of Dismissals, Quits, and Layoffs: A Multinomial Logit Approach. Southern Economic Journal 63, 10661073.

Turnover Intent

68

Chang, E. (1999). Career Commitment as a Complex Moderator of Organizational Commitment and Turnover Intention. Human Relations 52, 1257-1278. Clark, A.E., (1997). Job Satisfaction and Gender: Why are Women so Happy at Work? Labour Economics 4, 341372. Cotton, J. & Tuttle, J. (1986). Employee Turnover: A Meta Analysis and Review with Implications for Research. Academy of Management Review 11, 55-70. Crosby, F.J., (1982). Relative Deprivation and Working Women. Oxford University Press, New York. Currivan, D. (1999). The Causal Order of Job Satisfaction and Organizational Commitment. Human Resource Management Review 9, 495-524. Dalton D. R., Krackhardt D. M. & Porter L. W. (1981). Functional Turnover an Empirical Assessment, Journal of Applied Psychology 66, 716-721. Farmer, S. & Fedor, D. (1999). Volunteer Participation and Withdrawal: A Psychological Contract Perspective on the Role of Expectations and Organizational Support. Nonprofit Management & Leadership 9, 349-367. Forrier, A. & Sels, L. (2003). Flexibility, Turnover and Training. International Journal of Manpower 24, 148-168. Frisina, A., Murray, M. & Aird, C. (1988). What do Nurses Want? A Review of Satisfaction and Job Turnover Literature, The Nursing Manpower Task Force of the Hospital Council of Metropolitan Toronto Report, Toronto, Ontario. Goldenhar, D. (2003). The Benefits of Flexible Work Arrangements. Advancing Women Professionals. 1-11. Greenhalgh, L.& Rosenblatt, Z. (1984) Job Insecurity: Toward Conceptual Clarity. The Academy of Management Review 9, 438-448.

Turnover Intent

69

Henneberger, F. & Sousa-Poza, A. (2007). Arbeitsplatzstabilitaet und Arbeitsplatzwechsel in der Schweiz: Eine Empirische Analyse der Motive und Bestimmungsgruende. 2.Auflage. Bern: Haupt. Henneberger, F. & Sousa-Poza, A. (2002). Arbeitsplatzwechsel in der Schweiz. Bern, Stuttgart, Wien: Haupt. Hesselink, D. & Vuuren van, T. (1999) Job Flexibility and Job Insecurity: The Dutch Case. European Journal of Work and Organizational Psychology 8, 273-293. Hill, J., Hawkins, A., Ferris, M.& Weitzmann, M. (2001). Finding an Extra Day a Week: The Positive Influence of Perceived Job Flexibility on Work and Family Life Balance. Family Relations 50, 49-54. Hom, P.W., & Griffeth, R.W. (1991). A Structural Equations Modeling Test of a Turnover Theory: Crosssectional and Longitudinal Analysis. Journal of Applied Psychology 76, 350-366. Hom, P. W., & Kinicki, A. J. (2001). Toward a Greater Understanding of How Dissatisfaction Drives Employee Turnover. Academy of Management Journal 44, 975-987. Homans, G. (1961). Social Behavior: Its Elementary Forms. New York: Harcourt. Iverson, R. (1999). An Event History Analysis of Employee Turnover: The Case of Hospital Employees in Australia. Human Resource Management Review 9, 397-418. Jovanovic, B. (1979): Job Matching and the Theory of Turnover. Journal of Political Economy 87, 972-990. Kim, S.W., Price J.L., Mueller, C.W. &Watson, T.W. (1996). The Determinants of Career Intent among Physicians at a U.S. Air Force Hospital. Human Relations 49, 947-975. Lance, C.E. (1988). Job Performance as a Moderator of the Satisfaction-Turnover Intention Relation: An Empirical Contrast of the Two Perspective. Journal of Organizational Behavior 9, 271-280.

Turnover Intent

70

Lee, K., Allan, N. & Meyer, J. (2001). The Three Component Model of Organizational Commitment. Applied Psychology 50, 596-614. Lee T. W. & Mitchell T. R. (1994). An Alternative Approach: The Unfolding Model of Voluntary Employee Turnover, Academy of Management Review 19, 51-89. Lee T. W., Mitchell T. R., Holtom B. C., McDaniel L. S. & Hill J. W. (1999). The Unfolding Model of Voluntary Turnover: A Replication and Extension, Academy of Management Journal 42, 450-462. Lee T. W., Mitchell T. R., Wise L. & Fireman S. (1996). An Unfolding Model of Voluntary Employee Turnover. Academy of Management Journal 39, 5-36. Locke, E. (1969). What is Job Satisfaction? Organizational Behavior & Human Performance 4, 309-336. Lum, L., Kervin, J., Clark, K. & Reid, F. (1998) Explaining Nursing Turnover Intent: Job Satisfaction, Pay Satisfaction, or Organizational Commitment? Journal of Organizational Behavior 19, 305-320. Magner, N.& Welker, R. (1996). The Interactive Effects of Participation and Outcome Favourability on Turnover Intentions and Evaluations of Superisors. Journal of Occupational & Organizational Psychology 69, 135-143. Mano, O. (1994). The Differences between Barnard's and Simon's Concepts of Organization Equilibrium--Simon's Misunderstanding about Barnard's Intention. Economic journal of Hokkaido University 23, 13-28. March J. G. & Simon H. A. (1958). Organizations, Wiley, New York. Marrow, A. (1967). Management by Participation: Creating a Climate for Personal and Organizational Development, Harper & Row, New York. Mace, F.C. (1990). A Collateral Effect of Reward Predicted by Matching Theory. Journal of Applied Behavior Analysis 23, 197-205.

Turnover Intent

71

McGregor, D.M. (1957). The Human Side of Enterprise. In Shafritz, J.M., Ott, J.S. & Jang, Y.S. (Eds). Classics of Organizational Theory, 6th Ed., Thomson, London. Mobley, W.H. (1977). Intermediate Linkages in the Relationship between Job Satisfaction and Employee Turnover. Journal of Applied Psychology 62, 237-240. Mobley W. H., Griffeth R., Hand H. & Meglino B. (1979). A Review and Conceptual Analysis of the Employee Turnover Process, Psychological Bulletin 86, 493-522. Morrell, K., Loan-Clarke, J. & Wilkinson (2004). Organizational Change and Employee Turnover. Personnel Review 33, 161-173. Morrell, K., Loan-Clarke, J. & Wilkinson (2001). Unweaving Leaving: The Use of Models in the Management of Employee Turnover. Business School Research Series, 1-65. Mowday R.T. Steers R.M. & Porter L.W. (1978). The Measure of Organizational Commitment, University of Oregon, Oregon. Mueller, C.W. & Price, J. (1990). Economic, Psychological, and Sociological Determinants of Voluntary Turnover. Journal of Behavioral Economics 19, 321-336. Mueller, C.W.,Wallace, J.E., (1996). Justice and the Paradox of the Contented Female Worker. Social Psychology Quarterly 59, 338349. Porter L. W. & Steers R. M. (1973). Organizational, Work and Personal Factors in Employee Turnover and Absenteeism, Psychological Bulletin 80, 151-176. Price J. L. & Mueller C. W. (1981). A Causal Model of Turnover for Nurses, Academy of Management Journal 24, 543-565. Price, J. (1995). A Role for Demographic Variables in the Study of Absenteeism and Turnover. The international Journal of Career Management 7, 26-32. Price, J. (1997). Handbook of Organizational Measurement. International Journal of Manpower 18, 303-558.

Turnover Intent

72

Price, J. (2001). Reflections on the Determinants of Voluntary Turnover. International Journal of Manpower 22, 600-624. Ribelin, P.J. (2003). Retention Reflects Leadership Style. Nursing Management 34, 18-20. Rousseau, D. M. (1989). Psychological and Implied Contracts in Organizations in Farmer, S. & Fedor, D. (1999). Volunteer Participation and Withdrawal: A Psychological Contract Perspective on the Role of Expectations and Organizational Support. Nonprofit Management & Leadership 9, 349-367. Royalty, A. (1998). Job-to-Job and Job-to-Nonemployment Turnover by Gender and Education level. Journal of Labor Economics 16, 392443. Sheridan J. E. & Abelson M. A. (1983). Cusp Catastrophe Model of Employee Turnover, Academy of Management Journal 26, 418-436. Sommers, M. (1995). Organizational Commitment, Turnover and Absenteeism: An Examination of Direct and Interaction Effects. Journal of organizational behavior 16, 49-58. Sousa-Poza, A. & Henneberger, F. (2002). Analyzing Job Mobility with Job Turnover Intentions: An International Comparative Study. Research Institute for Labour Economics and Labour Law 82, 1-28. Sousa-Poza, A. (2007). The Effect of Job Satisfaction on Labor Turnover by Gender: An Analysis for Switzerland. The Journal of Socio-Economics 36, 895913. Steers R. & Mowday R. (1981). Employee Turnover and Post-decision Accommodation Processes, in Cummings, L. & B. Staw, B.(1985) Research in Organizational Behavior, JAI Press, Connecticut. Stigler, G. (1961). The Economics of Information. The Journal of Political Economy 69, 213225. Tett, R.& Meyer, J. (1993). Job Satisfaction, Organizational Commitment, Turnover Intention and Turnover: Path Analyses based on meta-analytic findings. Personnel Psychology 46, 259293.

Turnover Intent

73

Tziner, A. & Birati, A. (1996) Assessing Employee Turnover Costs: A Revised Approach. Human Resource Management Review 6, 133-122. Viscusi, K. (1980). Sex Differences in Worker Quitting. The Review of Economics and Statistics 62, 388-398.

Data set
HR-Barometer 2007 International Social Survey (ISSP) 2005: Work Orientations

Internet
Lehrstuhl HRM der Universitaet Zuerich: Microsoft Powerpoint-Intergration: URL: http://www.hrm.unizh.ch/03_studium/veranstaltungen/hrm_2/Folien_HRMII_FS08/Integration_ HRM_II_FS08.pdf (Stand: 03.12.2008). States of Jersey: Job Design: http://www.gov.je/SocialSecurity/Employment/Employment+Relations/THE+AZ+OF+WORK/Job+Design.htm (Stand: 06.14.2008). University of Michigan-Dearborn: Endogenous Variable: http://wwwpersonal.umd.umich.edu/~delittle/Encyclopedia%20entries/endogeneous%20variable.pdf (Stand: 01.03.2003). University of Wisconsin-Extension: How much does your employee turnover cost?: http://www.uwex.edu/CES/cced/economies/turn.cfm (Stand: 06.14.2008).