Employee Turnover 1

Prof. John Kammeyer-Mueller MGT 4301

Parting thoughts
What are some traditional break-up lines? Some other reasons for relationship break-ups? How fast do people break up? Why do I talk about break ups?
All of the concepts are similar to turnover
Internal causes of break ups External causes of break ups There are numerous processes for breakups

Types of Employee Turnover: Employee Initiated

Types of Employee Turnover: Organization Initiated

When is employee turnover a good thing?

Adaptive turnover effects
Who tends to leave based on internal factors? How can turnover benefit organizational strategy?

Maladaptive turnover effects

Who tends to leave based on external factors? What are some of the costs of turnover?

(Trevor, Gerhart, Boudreau, 1997).

Different Reasons for Turnover

Voluntary turnover
Employee initiated Because of dissatisfaction or alternatives

Involuntary turnover
Employer initiated For reasons of poor performance or business problems

Bad features Good features

Bad features Good features

Measurement of Turnover: Breakouts and Benchmarks

Breakouts
Analysis of turnover data aided by deciding on categories of data
Type of turnover Type of employee Job category Geographic location

Benchmarks
Internal - Trend analysis External - Compare internal data with external data
Exh. 14.3: Data from job openings and labor turnover survey

Measurement of Turnover: Reasons for Leaving

Important to ascertain, record, and track reasons why employees leave Tools
Exit interviews
Formal, planned interviews with departing employees

Postexit surveys
Surveys sent to employees soon after their last day

Employee satisfaction surveys

Surveys of current employees to discover sources of dissatisfaction which may become reasons for leaving Results can provide information to pre-empt turnover Require substantial resources

Guidelines: Conducting Exit Interviews

Interviewer should be a neutral person who has been trained in how to conduct exit interviews Training issues
How to put employee at ease and explain purpose How to follow structured interview format and take notes How to end interview on positive note

Structured interview format should contain questions about unavoidable and avoidable reasons for leaving
Exh. 14.4: Examples of Exit Interview Questions

Interviewer should prepare by reviewing interview format and interviewees personnel file Interview should be conducted in private, before employees last day Interviewee should be told interview is confidential

Well, its time for so long

Employers often get rid of employees for very different reasons
Individual termination Layoff Targeted layoffs Downsizing Voluntary retirement

Exhibit 14.2: Causes of Voluntary Turnover

Ex. 14.9 Most and Least Effective Retention Initiatives

Ease of Leaving
Two points of attack
Provide organization-specific training
Should organization invest in training to provide general or organization-specific KSAOs? Combine training strategy with a selection strategy focused on assessing and selecting general KSAOs

Increase cost of leaving by providing

Above-market pay and benefits Deferred compensation Retention bonuses Desirable location of companys facilities

Alternatives
Approaches to make internal alternatives more desirable than outside alternatives
Internal staffing
Encourage employees to seek internal job opportunities Provide attractive internal options outside of traditional internal staffing system

Responding to external job offers entails developing appropriate policies

Decide whether to provide counteroffers or not Determine types of employees to provide counteroffers Decide who will develop counteroffer and nature of approval process

The Labor Market Strikes

Often the labor market will affect employee turnover rates
Higher turnover in periods of low unemployment The relationship between job satisfaction and turnover is higher when there are many alternatives

Why does this occur?

The Labor Market Strikes: Hulin, Roznowski, & Hachiya

Often the labor market will affect employee turnover rates
Higher turnover in periods of low unemployment The relationship between job satisfaction and turnover is higher when there are many alternatives

Some ways labor markets drive turnover

Job opportunities influence job satisfaction Job opportunities influence turnover directly

Leave a Good Job, Stay in a Bad One

Comparison to alternatives (Thibault & Kelly)
Evaluate present status Evaluate next best alternative Whether the current status is acceptable or not is dependent on the level of alternatives

How do each of the following affect your appraisal of your current partner?
An attractive classmate is interested in you A former relationship partner has become very unattractive over time

Labor Markets, Satisfaction, and Turnover

Trevor, 2001

Labor Markets, Satisfaction, and Turnover

Across employees, job satisfaction was more strongly related to turnover when the unemployment rate was low Under conditions of low unemployment, education was unrelated to turnover, but in high unemployment, more educated workers were more likely to turnover The relationship between job satisfaction and turnover is considerably greater among those high in cognitive ability Trevor, 2001

Turnover in Organizations: The Received Wisdom of Ages

Job satisfaction Org. commitmen t Withdrawal cognitions Internal assessment

Expected utility of withdrawal Job search External comparison Compare to alternatives Turnover

Satisfaction, commitment, and time

Comparison to alternatives and time

Job Performance and Turnover

What does this graph show? Why would this happen?

Making This Work To Your Advantage

The dark line represents a company with pay for performance
Effects on equity perceptions Effects on worst employees Effects on perceived alternatives

Sturman & Trevor: Performance Trends and Turnover

HLM model
Those who eventually turn over do not have higher or lower initial performance While most individuals improve performance over time, those who turnover do not improve Consistent with a behavioral withdrawal theory of turnover

Sturman & Trevor: Performance Trends and Turnover

Hazard models show performance trends

Current performance is negatively related to turnover hazard Performance trends further explain turnover hazard

Sturman & Trevor: Performance Trends and Turnover

Sturman & Trevor: Performance Trends and Turnover

Implications
Ignoring those who leave from dynamic performance models leads to a shortcoming in understanding performance Performance appears to follow predictable trends based on employee intentions to turnover (or vice versa) Performance and other predictors of turnover should be measured at repeated points in time

Emerging trends: Alternatives to the slow burn

Is turnover always this gradual?
Some people leave their jobs quickly

Is turnover really this rational?

Some people search for no alternatives Some people have very emotional explanations for their turnover events Many people will or wont turnover based on the people they work with

Image theory (Beach)

Evaluation seldom is extensive Choice occurs rarely Behavior largely is pre-programmed Decision makers have a variety of strategies

Emerging trends: Alternatives to the slow burn

Stages of decision making (Beach)
Screening: determine if the current situation matches any of three pre-set images
Value images (standards) Trajectory images (goals) Strategic images (action plans)

Deciding: if the information is not consistent with the image, a decision process is engaged
If images are in conflict, the decision process will be considerably slower Images are again consulted to screen through and select a course of action

Critical concept: deciding to decide!

Lee, Mitchell, et al.: The Unfolding Model

Key terms
Shock: a jarring event that initiates the process of thinking about a job; it need not be unexpected Script: a pre-existing plan of action Search: looking for alternative employment Image violations: values, goals, and strategies do not fit with the organization Job satisfaction

Lee, Mitchell, et al.: The Unfolding Model

Dramatic events can alert someone to reconsider their scripts
Positive shocks on the job
Promotions, finishing projects

Negative shocks on the job

Conflicts with co-workers, harassment, poor performance

Positive shocks off the job

Marriage, having a baby

Negative shocks off the job

Death of a relative, illness of a relative

Lee, Mitchell, et al.: The Unfolding Model

Lee, Mitchell, et al.: The Unfolding Model

Four paths Path 1: one foot out the door
shock makes a person carry out a plan they had all along

Path 2: walking off in a huff

shock produces such a dramatic image violation that the person just leaves

Path 3: this really got me thinking

a shock produces image violations that lead to deeper consideration of alternatives

Path 4: I just dont like it here

low satisfaction levels prompt turnover processes that are either abrupt (4a) or slow and deliberate like traditional turnover models (4b)

Lee, Mitchell, et al.: The Unfolding Model

Retrospective interview data from their first study with nurses
Decision path 1: spouse retired, spouse relocated, started graduate school Decision path 2: required to take extra classes that were not expected, negative performance reviews, problems with spousal transfers Decision path 3: alternative job offers, negative social events in the job that spurred deeper thinking Decision path 4: mostly boredom with job, disliked what they were doing

Integrating the Events Model with Attitudes Models

When considered together, events and attitudes are both significant These effects are more pronounced in dynamic models Mediating search mechanisms only show up in dynamic models
Kammeyer-Mueller, Wanberg, Glomb, & Ahlburg, 2005

So What Does This Imply for Managers?

Be mindful of sudden or dramatic events that might lead people to re-consider their jobs Be prepared to match offers from outside competitorseven a satisfied individual might leave if theres the right type of shock Be very mindful of conflicts on the job, because these are the factors that most often lead to immediate turnover

Why you might not take an alternative

Embeddedness
(Mitchell, Holtom, Lee, Sablynski, & Erez, 2001).

Factors that keep a person from leaving a job because of factors that do not easily transfer across jobs Factors often have little to do with work attitudes

Embeddedness and Turnover

What does this graph show? What are the implications for managers?