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A conceptual model of labour turnover and retention
Jonathan Winterton Toulouse Business School
Abstract: While the importance of skill formation has been widely acknowledged in recent years, the issue of skill retention has been relatively neglected. Employers see little point in raising skills in sectors where a high proportion of individuals will leave, yet failure to invest in training and development may contribute to higher labour turnover. Drawing upon an extensive literature review, this paper develops a conceptual model of labour turnover and retention that distinguishes four stages in the processes affecting an individual’s intention to quit, and actual separation from the job. Potential solutions that might reduce the quit rate and retain skilled labour are proposed in relation to these four stages.
Keywords: labour turnover, retention, job satisfaction, commitment
Renewed interest in labour turnover and retention, stimulated by skills shortages and demographic trends, is reﬂected in the increasing number of articles in the Academy of Management journals since 1995. By contrast, the HRD journals have given little attention to labour turnover, although labour turnover has assumed greater importance in the AHRD conferences, particularly as the costs of replacing and retraining employees is more thoroughly understood. Huselid (1995) demonstrated that HRM practices affect labour turnover, productivity and organizational performance, and there is evidence that the volume of HRD is negatively related to voluntary labour turnover (Bartlett et al. 2001; Lynch and Black 1998). Similarly, labour turnover has a profound impact upon HRD initiatives for three reasons. First, the major costs of labour turnover are not recruitment and selection, although these are not insigniﬁcant, but training and development. Second, turnover raises questions of skills retention and ‘core competence’ involving the transfer of skills and knowledge, especially those that are tacit and informal, from the departing employee to other employees. Third, to establish an effective strategy for skill formation, labour retention must be high enough for the average length of service to provide a return on HRD investment. As Greenhalgh and Mavrotas noted:
While employer-funded training adds to the ﬁrm’s stock of human capital, this stock is subject to attrition caused by inter-ﬁrm mobility of workers (often termed the ‘poaching problem’). In the absence of subsidies or other policies to redress the positive externality, there will be under-investment in training arising from the inability to capture returns. (Greenhalgh and Mavrotas 1996: 131)
Human Resource Development International ISSN 1367-8868 print/ISSN 1469-8374 online ª 2004 Taylor & Francis Ltd http://www.tandf.co.uk/journals DOI: 10.1080/1367886042000201967
The result is the paradox that, when faced with endemic high labour turnover, managers ﬁnd it difﬁcult to justify HRD since there will be little return on such investment, yet this lack of investment in turn contributes to low labour retention. Clearly there is a need to create a virtuous cycle of training and development conducive both to promoting labour retention and delivering a return on HRD investment and to do this it is necessary to understand the processes underlying labour turnover. Recognizing the need for theory and model building in HRD, Jacobs (1990) argued that ‘relevance to practice remains the ultimate criterion for the worth and value of theory’. With this in mind, this paper offers a conceptual model addressing the issue of labour turnover and retention. The model developed here was used to improve labour retention in the UK clothing industry (Taplin et al. 2000, 2003) and the aim of publicizing it more widely is to encourage its adoption in other contexts in order to explore its broader validity and utility. There are three main reasons why employees leave work: retirement, dismissal or voluntary resignation. The ﬁrst two, retirement and dismissal, are heavily inﬂuenced by management, whereas the last represents a personal decision to quit work. Such premature voluntary separation by individual employees is the focus of this paper, which outlines a composite theory of labour retention developed from the literature. Labour turnover is expensive. The Institute of Personnel and Development estimated in 1997 that it cost £1,426 in advertising, recruitment and training costs for each manufacturing operative who leaves (IPD 1997). To this must be added the important, if less tangible, loss of morale and productivity associated with an uncertain working environment. Labour turnover is not always dysfunctional, however: if poorly performing employees leave and are replaced by better performing ones, there is a net gain to the organization (Abelson and Baysinger 1984; Park et al. 1994). Neither is labour turnover always avoidable (Abelson 1987), and in high turnover sectors managers may not view turnover rates of over 25 per cent as a problem, and still less as a reﬂection of job dissatisfaction. Edwards and Scullion (1982: 57), for example, reported that management in a clothing plant, who had no difﬁculty in recruiting skilled sewing machinists to replace those that left through marriage or pregnancy, accepted high turnover as inevitable with a female workforce. The focus of this paper, however, is on avoidable, dysfunctional labour turnover and its implications for HRD practice.
The process of voluntary separation
Most conceptual models of voluntary labour turnover assume that job dissatisfaction is the root cause of labour turnover, and there is considerable evidence of the negative relationship between employee turnover and job satisfaction (Brayﬁeld and Crockett 1955; Locke 1975; Vroom 1964). Such job dissatisfaction causes employees to leave once they have reached decisions on the desirability of movement and the perceived ease of movement (March and Simon 1958). Prior to leaving the organization, individuals experiencing job dissatisfaction explore job alternatives and evaluate these in terms of their expected utility (Mobley 1977). The traditional approach therefore views voluntary separation as a consequence of low job
1985.in the degree to which the act of quitting is impulsive rather than based on a subjectively rational decision process’ (1977: 239). The second study. Theoretical critiques of the Mobley model have suggested that it is over-speciﬁed. Lee 1988. The last ﬁve stages effectively represent the component parts of perceived alternative opportunities. Several studies have also challenged the validity of the Mobley model on the basis of empirical evidence (Dalessio et al.1986. evaluating alternatives. and. Some employees then simply leave. . ‘understanding of the manner in which the actual decision is made is far from complete’ (1973: 173). so Mobley anticipated that there would be ‘individual differences in the number and sequence of steps in the withdrawal decision process. searching for alternatives. intention to search for alternatives. Michaels and Spector 1982. Porter and Steers believed insufﬁcient attention had been paid to the ‘psychology of the withdrawal process’. which include the alternative of withdrawal from the labour market as well as new job opportunities. The ﬁrst study. Mobley argued that intention to leave. which in turn encourages formation of quit decisions and appraisal of the expected utility of job seeking and quitting. Just as Hellriegel and White (1973) argued that individuals would assess perceived alternative opportunities using different job factors. and showed that ‘as job satisfaction declined. was longitudinal. Hom and Griffeth (1991) designed two extensive studies to test the validity of the Mobley model compared with the alternative proposed by Hom et al. whereas other quit without prior marketplace entry’ (Hom and Griffeth 1991: 358). Lee and Mitchell (1994) proposed an alternative ‘unfolding model’ of employee turnover derived from image theory and argue that factors other than job 373 . as a result of which. which are then compared with their present position. it increasingly reinforced expected utility of withdrawal’ (ibid:. Hulin et al. Miller et al. establishing the importance of intermediate stages between job dissatisfaction and the act of quitting. While Porter and Steers proposed that an expressed intention to leave represented the next logical step in the process after experiencing job dissatisfaction. but suggested that speciﬁc withdrawal intentions reﬂected different aspects of a general withdrawal intention. while others ﬁnd alternative opportunities. in the degree to which the process is conscious. those ﬁnding better alternatives also leave. Bluedorn 1982. Mobley’s model proved extremely inﬂuential in developing turnover theory (Griffeth and Hom 1988. Mowday et al. Hom et al. 1979. Mobley et al. and comparing alternatives with the present job. (1984) developed an alternative network where job dissatisfaction leads to thoughts of quitting. of 244 nurses. thinking of quitting. Price and Mueller 1981). ‘following several other steps. experiencing job dissatisfaction.Winterton: A conceptual model of labour turnover and retention satisfaction combined with alternative labour market opportunities that are subjectively perceived as having higher utility and relative ease of movement to alternative employment (Price 1977). . Mobley 1982. Mobley’s model involves eight stages before the intention to quit: evaluating the existing job. 359 – 60). 1984). evaluating the expected utility of search and cost of quitting. detailing elements in the process that are effectively redundant (Arnold and Feldman 1982. may be the last step prior to actual quitting’ (1977: 237). conﬁrmed the validity of the elements in Mobley’s model. It also distinguished two routes of departure for disaffected employees: ‘some leavers enter the marketplace before quitting. of another 190 nurses. Morrow 1983). 1979.
the data suggested that ‘the decision to quit appears frequently to involve a process different from the rational choice among alternatives intended to optimise utilities’. lengthy rest periods or passive job behaviour (Kraut 1975. such as a female employee leaving due to pregnancy. Third. Studies that considered both factors found organizational commitment to have the stronger effect on turnover (Peters et al. In the fourth decision path. In this model. so that the individual experiences such job dissatisfaction that they quit regardless of the presence or absence of alternatives. The decision path may entail repeating a response to an event that has occurred before. there is no shock but rather a gradual reevaluation. Empirical studies have shown that job dissatisfaction can equally result in alternative forms of employee withdrawal such as absenteeism. First. even though these two last were highly correlated with each other. most evidence points towards them being complementary behaviours (Mitra et al. Lee et al. Another decision path represents a response to a shock that causes the employee to re-assess their attachment to the organization. Porter et al. (1979) reported a positive correlation between low organizational commitment and turnover. Williams and Hazer 1986). Rosse and Hulin 1985. (1996: 32) found that 55 per cent reported job dissatisfaction. the initiating action. usually a ‘shock to the system’. Curry et al. However. the value of the unfolding model in conceptualizing the labour turnover process was demonstrated in three respects. followed by a job search and evaluation of alternatives before quitting. ‘58 per cent of the interviewees reported a shock as having an effect on their decision to quit’. such as industrial action. In a study of forty-four nurses who had voluntarily left their jobs. since there is evidence that different factors inﬂuence intent and actual separation (Kirschenbaum and Weisberg 1990). that individuals need not compare their current job with alternatives and that the decision to quit may be based on a compatibility judgement rather than an evaluation of expected utility.Peer-Reviewed Articles dissatisfaction can initiate the process. typically involving ‘image violation and disaffection’. Second. However. While there has been extensive debate concerning the extent to which absence and turnover are alternatives. 1986. Rosse and Miller 1984). 1992). 374 . in 45 per cent of cases. which conforms to the traditional turnover models. McFarlane Shore and Martin (1989) similarly found turnover intentions correlated more signiﬁcantly with organizational commitment than with job satisfaction. while Hom et al. leads to alternative decision paths and cognitive activities. A third involves a shock that causes the employee to consider whether they should form an attachment with another organization. Atkinson and Lefferts (1972) reported a high correlation between the frequency with which people thought about quitting and actual termination. Several studies have demonstrated the importance of distinguishing between job satisfaction and organizational commitment (Cotton and Tuttle 1986. 1981. labour turnover is often interpreted as an expression of conﬂict adopted where other forms of protest. Since it may be indicative of discontent with the work situation. Arnold and Feldman 1982). are uncommon. Kraut (1975) found a positive association between job dissatisfaction and turnover. individuals ‘reported quitting their jobs without having actual job offers in hand’ and a number appeared to ‘quit with minimal mental deliberation’. it is important to distinguish between an expressed intention to quit and the actual separation. 1974.
perceived alternatives. 1986. While the process of voluntary separation from employment should be regarded as involving distinct stages. but not necessarily to an actual separation. Woodward 1975) also inﬂuence the decision to quit. Which of the four factors has most inﬂuence on intentions and actual separation will invariably depend upon speciﬁc circumstances. but be prepared to quit because the organizational culture does not expect employee loyalty and there are extensive Figure 1 Stages in the process of voluntary separation 375 . Park et al. or by the ease of movement to another position. Longitudinal studies have demonstrated that there is often a signiﬁcant temporal lag between the elements of job dissatisfaction. Hom and Griffeth 1991. a web-page designer may enjoy a very high level of satisfaction from creative activity and task autonomy. low organizational commitment or ease of movement in any combination. Youngblood et al. 1979. 1994) play a part in the decision to quit. Armknecht and Early (1972). in the latter case. an intention to quit can be translated into actual separation given that there is sufﬁcient ease of movement and organizational commitment is low. irrespective of the level of job satisfaction. and the process can be initiated at any point. While labour turnover is clearly associated with job dissatisfaction. The intention to quit may be stimulated by job dissatisfaction (a push effect) or by perceived alternatives (a pull effect) and.Winterton: A conceptual model of labour turnover and retention Given low job satisfaction. For example. ease of movement and actual separation (Curry et al. the amount of unexplained variation in turnover and the temporal lag between the elements suggests that the process is not necessarily a linear one and can be represented as in Figure 1. Exogenous factors (Sussman and Cogswell 1971. Indigenous organizational variables (Mobley et al. noted that voluntary terminations are closely related to economic conditions. When job satisfaction is low and perceived opportunities are attractive. for example. The actual quit may be stimulated by low commitment. job satisfaction need not be low. Muchinsky and Tuttle 1979. the correlations explain only part of the variance (Locke 1976). Rusbult and Farrell 1983. low organizational commitment. intention to quit. Turnover could be high even where there is a high level of job satisfaction because of abundant labour market opportunities. The intention to quit and the actual separation are inﬂuenced by the combined effects of the four factors that occupy the corners of the diagram in Figure 1. 1983). the perception of alternative (desirable) opportunities can lead to an expressed intention to quit.
workers in a small enterprise in a depressed area may accept relatively unattractive conditions because a charismatic entrepreneur is seen to be providing the best conditions possible in a highly competitive environment and has succeeded in cultivating loyalty. equally the theoretical basis of Herzberg’s dichotomy of factors remains unjustiﬁed. Wright (1989) notes that there is little empirical evidence in support of Maslow’s hierarchy. Each of the four areas is considered below. The factors related to job satisfaction and organizational commitment are more conducive to inﬂuence by management since they are largely internal to the organization. Motivation theories. Aldefer (1972) developed a theory based on existence. some inﬂuence can also be exerted on these areas through strategies developed within the organization. relatedness and growth. Content theories address what individuals are expected to need from work. Labour retention strategies should therefore focus on these four areas. are distinguished from hygiene factors. In the model of the process of voluntary separation. of the four areas. Process theories differ from content theories in 376 . designed to break the chain of events leading to separation in any. Equally. whereas the factors affecting perceived opportunities and ease of movement are more a function of the labour market and individual circumstances.Peer-Reviewed Articles opportunities to advance career and earnings. because organizational commitment is high and there are few perceived opportunities for alternative employment. Nevertheless. which are addressed in the following sections. in which motivators. the absence of which produce job dissatisfaction. Nevertheless. The most inﬂuential examples are Maslow’s (1943) hierarchy of needs and Herzberg’s (1968. where job satisfaction is low. Some of these factors may have an effect on more than one area. incorporating both the concepts of a hierarchy of needs and needs frustration as well as fulﬁlment. 1959) theory. Herzberg et al. the presence of which create job satisfaction. the degree of imperfection of labour market information is an important consideration. By implication. For example. ceteris paribus. it is reasonable to hypothesize that. where job satisfaction and organizational commitment are high. Job satisfaction Job satisfaction is the result of a wide range of factors that affect the quality of working life. and these need to be considered in order to develop a model of labour retention for practical application. the four areas held to inﬂuence the decision to quit and actual separation are underpinned by a variety of other factors. offering various frameworks for analysing job satisfaction. labour turnover will be high. can be grouped into content and process theories. Since it is employee perceptions of labour market opportunities that will ultimately affect turnover. but for simplicity each is attributed to only one because the strategy should form an integrated whole. organizational commitment is low and there is ease of movement to other jobs. turnover may remain low despite low job satisfaction. turnover should be relatively low. or all. the labour market offers few alternative opportunities and movement to take up alternatives is difﬁcult. there are perceived to be better opportunities in the labour market.
Content theories suggest that. feeling properly rewarded in relation to others (Adams 1963). for whom the costs of replacement are particularly high. Self-directed teams provided opportunities for job rotation. The implications for labour retention are that organizations need to maintain conditions conducive to high job satisfaction (Herman 1999). In recognition of these needs. This is conﬁrmed by turnover studies that found perceived inequity in relation to others in the company was a major factor inﬂuencing voluntary quits (Van Yperen et al. it is important to maintain adequate remuneration levels.Winterton: A conceptual model of labour turnover and retention addressing cognitive behaviour rather than instinctive behaviour. 1996). Typically. but does this in comparison with others. Expectancy theory suggests that rewards are balanced against the effort required to attain them and individuals then make decisions about accepting employment and how hard they will work in a particular job (Vroom 1964). Expectancy theory accepts that the value of incentives differs between people. Herzberg’s motivators included opportunities for personal achievement. The implications for work organization are considered here. teamworking was introduced in some manufacturing sectors to raise performance and improve job satisfaction. considers the whole work environment and argues that individuals are motivated to work when they anticipate achieving what they expect from their jobs. (horizontal) job enlargement and (vertical) job enrichment. job security and comfortable working conditions. and where the individual’s outcome-input ratio compares favourably with their perception of other people’s. 377 . for example. 1992: 219). they experience equity. by structuring work to allow meaningful social interaction. while at the apex of Maslow’s hierarchy are self-actualization needs. hygiene need. and failure to pay adequate attention to these will inevitably result in job dissatisfaction. employee motivation and job satisfaction may be advanced by addressing three sets of needs: afﬁliation. in order to avoid job dissatisfaction. recognition. but did not necessarily entail much devolution of responsibility. with some individuals valuing money and others valuing recognition or self-esteem (Vroom 1964). employees need adequate remuneration. Working conditions may also be considered a hygiene factor. and by providing opportunities for personal development and advancement. this involved reorganizing line production into a modular or cellular production structure and the creation of work teams or cells. Herzberg’s hygiene factors included remuneration. Adams (1963) proposed an equity theory in which the individual still balances inputs and outcomes. working conditions and supervision. These needs will be met. Each is considered below. Vroom’s (1964) expectancy theory. power and achievement (Hellriegel et al. Equity theory would suggest that relative perceived treatment is important. For most individuals the reality of an instrumental attachment to work necessitates sufﬁcient reward to maintain the cash nexus irrespective of the ideology and idealism of psycho-social motivation theories. While remuneration is generally viewed as a lower-order. respectively. interpersonal relations. Once these are satisﬁed. especially among high performers. working conditions and work organization. efforts and rewards. by empowering individuals and work groups. responsibility and individual advancement and growth. while training and development is considered under building commitment. Three areas in particular are important: remuneration.
with the exception of satisfaction with supervisors. 1995. was related to propensity to leave employment. Glisson and Durick 1988. ‘there is no evidence of a systematic relationship between commitment and its presumed consequences – turnover and job performance – even though these links are almost implied by the deﬁnition of the concept. affective commitment is the most widely studied as it has consistent relationships with organizational outcomes such as performance. Tannenbaum et al. Finegan 2000. upward and downward communication. in turn. Bartlett and McKinney (2000) found signiﬁcant differences in organizational commitment between those who left and those who stayed. 1998). Affective commitment refers to the employee’s emotional attachment to. extrinsic rewards. job involvement. Mowday et al. Committed employees tend to have better attendance records and longer job tenure than non-committed employees (Kline and Peters 1991. motivation to learn and employee perceptions of organizational values to be associated with employee commitment (Bolon 1997. as are the wide range of factors affecting them individually and severally. intrinsic rewards. turnover. Somers 1995). Both employee commitment (Benkhoff 1997) and employee satisfaction (Bolon 1997) have been found to be positively associated with organizational success. Similarly. Researchers have argued that the importance of the organization commitment construct is derived from its relationship with work-related behaviours such as absenteeism. despite extensive literature on employee commitment. Meyer and Allen (1991) distinguish three components of organizational commitment: affective. Normative commitment reﬂects a feeling of obligation to continue working for the employer (they stay because they feel they ought to). performance and leader – subordinate relations (Eby et al. People attracted 378 . Of the three components. Continuance commitment is deﬁned in terms of awareness of the costs associated with leaving the organization (they stay because they need to). continuance and normative commitment. 1982. promotion satisfaction. while Boles and Babin (1996) found that emotional exhaustion and job satisfaction were signiﬁcantly related to commitment which. age of the organization. job characteristics. Facteau et al. job satisfaction. Young et al. identiﬁcation with and involvement in the organization (they stay because they want to). Studies have variously found job satisfaction. and retention (Meyer and Allen 1997).’ Clearly both job satisfaction and organizational commitment are complex and interrelated.Peer-Reviewed Articles Lee and Maurer (1997) found among knowledge workers in high turnover occupations that low levels of job satisfaction play a less signiﬁcant role in turnover than previously assumed. Benkhoff (1997: 114) claims that. Organizational commitment The effect of organizational commitment on labour retention is emphasized in much of the turnover literature. 1999. attendance. 1991. There appears to be a relationship between value congruence and both job satisfaction and organizational commitment (Meglino et al. leadership satisfaction. trust in supervisors. Finegan 2000). was not found to differ between the two groups. 1989). yet job satisfaction.
rather than the causes. trainer training and orientation training. teamworking’ coupled with a conception of employees as ‘resources to be developed rather than as disposable factors of production’ (Wood and de Menezes 1998: 486). Workplace training inﬂuences organizational commitment (Bartlett 2000. The principles of building employee commitment entail establishing an appropriate organizational culture in which the ﬁrm’s mission is communicated to all employees and a sense of community is developed in which people are put ﬁrst. Price 1989) and that turnover has a negative effect on behavioural commitment (Mueller and Price 1989). Royalty 1996. Alvesson (1995) shows how the Swedish systems consulting ﬁrm Enator maintains labour turnover below the industry average. including key managerial employees and those with skills essential to the organization’s survival. creating a ‘turnover culture’ (Abelson 1996). for example through selective hiring and focused. Hatcher (2000) similarly demonstrated the beneﬁcial effects on turnover in a textile business of multiple performance interventions. It is difﬁcult to evaluate the return on investment in training because the effects cannot be easily isolated and the duration of the beneﬁt stream depends upon retention of human capital. Organizational commitment has also been linked to friendship centrality in the work place (Yoon et al.Winterton: A conceptual model of labour turnover and retention to an organization based on value congruence indicated high intentions to stay with the organization (O’Reilly and Chatman 1986) and a strong ﬁt between organizational and individual values predicted employee satisfaction and intent to stay with the organization a year later (Chatman 1991). 1997). value-based orientation. Such high-commitment management practices are characterized by the use of ‘information dissemination. despite paying below-average salaries. Tsui et al. minimal status differentials. which is positively associated with organizational trust (Krackhardt and Porter 1985). through promoting a friendly egalitarian organizational culture. second. This feedback effect can lead to commitment spiralling downwards as turnover spirals upwards. ﬁrst. which included the expansion of HRD efforts. Dessler (1999: 59) suggests there are several ways in which a ﬁrm can: achieve this feeling among employees that they are part of something larger and greater than themselves. but there is evidence of an inverse relationship between labour turnover and the extent of HRD (Chang and Wang 1995. organizational communication. create institutional charisma by linking their missions and values to a higher calling. and promote the commitment of employees to the mission and ideology. A retention strategy seeks to reverse this trend through building employee commitment. Research into the consequences of labour turnover. Greenhalgh and Mavrotas 1996. and both are widely acknowledged as 379 . 1994). dealing with management/supervisory issues. shows that the impact is not only economic (Staw 1980. Mowday (1984) proposed ‘buffering’ strategies for adapting to high turnover. There is evidence that employees are more committed to employers that show commitment to their long-term career development (Wood and Albanese 1995). problem-solving groups. job ﬂexibility. Kontoghiorghes and Bryant 2001. because this creates a core of highly committed employees. Arthur (1994) found that HR systems built on commitment rather than control were associated with lower turnover and higher productivity. because multi-skilling or cross-training of employees increases the ﬂexibility of the organization in the face of high turnover and. create a shared mission and an ideology that lays out a basic way of thinking and doing things. McMurray and Dorai 2001).
since tight labour markets provide more opportunities for alternative employment. researchers have tended to treat this as an external given. and developments over the past decade in the theory and practice of HRM and HRD also helped to stimulate renewed interest in employee involvement (Marchington et al. 1996). part of a labour retention strategy should therefore be addressed to altering employee perceptions. Nevertheless. Meyer and Allen 1997) and labour retention (Flamholtz and Lacey 1981). employee perceptions that alternative employment opportunities exist and are expected to offer higher returns. Since employee perceptions of alternative job opportunities appear to inﬂuence the intention to quit. Low unemployment rates should be positively associated with labour turnover. but there are intervening variables such as the quality and utility of alternative employment (Hom and Grifﬁth 1995) and work/family issues (discussed below). seeking explanations as to why particular individuals leave or stay. Schwab 1991). 1992). Recognition of the importance of the ‘people factor’ became popularized in the cliche that ‘with every pair of hands. Labour market conditions and economic prosperity can increase quits among workers who had not contemplated leaving earlier (Lee et al. both to themselves and to the organization’. 2003). Steel and Grifﬁth 1989). Perceptions of alternative opportunities and the ease of movement have been found to vary with an organization’s ﬁnancial rewards (Dreher 1982. (1995) found that individuals who were committed to the values and goals of the organization had higher levels of pre-training motivation. not only in remuneration but in relation to other factors affecting job satisfaction. Employee involvement is seen to be crucial to the success of businesses in the future. because of the need to harness the skills and energies of the whole workforce and to develop motivation. and has been demonstrated to generate positive work attitudes and improved performance (Cotton 1993). have been shown to inﬂuence the intention to quit (Gerhart 1990. The selection practices adopted can 380 .Peer-Reviewed Articles contributing towards organizational effectiveness (McMurray. Since labour market opportunities (for a particular class of employee) are the same for all. Employee participation can be introduced as a further element of a strategy to build commitment. Scott and Pace 2000. Some workers quit only to take a lower paying job in another sector. suggesting labour market effects are indirect (Hom and Grifﬁth 1995) and that other variables are at work (Hom and Kinicki 2001). Labour market opportunities Labour market conditions may be expected to have a profound inﬂuence on labour turnover since employees are less likely to quit if there are few alternative job opportunities. Facteau et al. a brain ´ comes free’. but high rates of unemployment do not necessarily dampen turnover as might be expected (Taplin et al. again suggesting a complex interaction of factors. commitment and leadership at all levels (Dessler 1999). Jackofsky 1984. Tannenbaum et al. (1991: 760) argued that ‘employees’ organizational commitment levels are likely to predispose them to view training as more or less useful. Organizational commitment equally plays a key role in training motivation.
Selective engagement of returners is a powerful way of reinforcing the message that the current position has more to offer than alternatives. Research into stability and survival rates. While it is an unproven assumption that short-tenure employees are equivalent to those who leave an organization (Campion 1991).Winterton: A conceptual model of labour turnover and retention contribute by ensuring that new recruits are well informed about the job offered and have had an opportunity to assess its relative attraction compared with alternative employment. which has been applied speciﬁcally to female workers (Somers 1996). implicitly making the comparison with alternative labour market opportunities. but by making the separation more costly to the individual. Ease of movement Ease of movement is a key factor affecting actual separation. Such an approach has proved useful in predicting ‘nonquitters’ among women (Light and Ureta 1992) and could be used to improve recruitment and selection to reduce the likelihood of individuals leaving. family-friendly policies and training are three ways of reducing ease of movement. A company newsletter is an effective way of spreading the vision and generating a culture in which personal and commercial successes become associated as they are celebrated. Management can also inﬂuence employee perceptions through communicating information relating to the beneﬁts of employment in their enterprise. ﬁnancial participation was encouraged in the UK through a series of Finance Acts that granted tax concessions for employee share ownership and proﬁt sharing on the assumption that these would contribute to improvements in performance and improved labour retention. although the empirical evidence on this is ambiguous (Hanson and Watson 1990. although it is difﬁcult to separate its effect from organizational commitment and job satisfaction (Trevor 2001). 381 . It is better that a potential employee withdraws before costs of induction or further training have been incurred. Wilson and Peel 1990). Financial participation is increasingly seen as a means of building employee commitment. encouraging returners can also substantially reduce training costs. proﬁt sharing. Financial incentives can also be designed to reduce employee mobility by rewarding the stayers through. managers spend more time on the shop ﬂoor sharing information about the state of the business while simultaneously keeping themselves informed about their employees. offers an alternative methodological approach. In the smaller low-turnover clothing enterprises. not only through creating the positive environment of job satisfaction and organizational commitment. increasing labour stability is clearly one way of reducing the costs of turnover. employee share ownership programmes (in the UK) and stock options (in the USA). for example. During the 1980s. as discussed below. In the case of highly skilled workers. since the returner is well placed to share information about why the alternative employment was less attractive than they had imagined. non-transferable shares and accumulated rights such as pensions and holidays. rather than turnover. Financial incentives. Part of a labour retention strategy should therefore seek to reduce employee mobility. with employees taking a share of the risks and rewards of enterprise through gain sharing.
Miller 1984). since the replacement cost of employees with speciﬁc skills is high. 382 . Glass and Riley 1998) provide evidence that child-care provision and employer leave arrangements in relation to maternity are important factors affecting turnover among female workers. Labour turnover is generally higher among women and. The model identiﬁes low job satisfaction coupled with perceived alternative opportunities as the triggers of intent to quit. and studies in the US (Maume 1991. as well as the ﬂexibility to allow individuals to reduce their hours during certain times of the year. as has been shown in an Australian study of absence (Vanden Heuvel and Wooden 1995). Shift times that correspond with school drop-off or collection times. An alternative interpretation would see training in ﬁrm-speciﬁc skills as reducing ease of movement in comparison with training in transferable skills. The above discussion has suggested four key areas of action: promoting job satisfaction. It was argued that any of the four areas could initiate the separation process. it may be that explanations for turnover differ between men and women. Conclusion This paper has considered in detail the literature relating to labour turnover and the competing theories of labour withdrawal to develop a simpliﬁed model of the process of voluntary separation. rather than the way the employees manage these themselves. absenteeism. Providing on-site child care also appears to improve labour retention (Casper and Landy 2001. altering employee perceptions (of alternative employment opportunities).Peer-Reviewed Articles Cohen (1995) concluded that the way organizations react towards non-work domains of their employees. Flexibility. especially in relation to working time. especially training that leads to a portable recognized qualiﬁcation. According to Flamholtz and Lacey (1981). Broader family-friendly policies can help reduce employee mobility. In promoting job satisfaction. employers often give a share of productivity gains arising from ﬁrm-speciﬁc training. There is substantial evidence that the introduction of family-friendly policies can assist in reducing turnover (Abbott et al. The purpose has been to generate a conceptual model that is both more comprehensive. in incorporating what has been demonstrated piecemeal in a wide range of turnover and retention studies. A second purpose in developing the model was to provide a framework for actions to reduce labour turnover and promote skills retention. turnover intentions and performance. the ﬁrst two are invariably more amenable to management intervention and have been the predominant concerns of labour turnover research. employees trained in ﬁrm-speciﬁc skills exhibit lower turnover than more broadly trained employees. while low organizational commitment and ease of movement are associated with actual separation. are invariably appreciated. although turnover is anticipated to be highest where all four are relevant. building organizational commitment. inﬂuences commitment and can predict work outcomes. and. 1998) since a proportion of turnover is a result of the incompatibility of work hours with family needs. and reducing ease of movement. creating a further tie between the employer and the worker. Of these four areas. turnover. and more useful in being practitioner-friendly. appears to be very important in sectors with predominantly female workers. such as tardiness.
more effective communication and selective reengagement of returners. family-friendly employment policies and training in ﬁrm-speciﬁc skills. the further utility of the model can be tested and its strengths and shortcomings established in a variety of occupational contexts. employee participation may facilitate more effective design of HRD initiatives and family-friendly policies affect the likelihood of employees engaging in learning outside working hours. with ﬁrm-speciﬁc competences extending these. Address for correspondence Jonathan Winterton Groupe ESC Toulouse 20 Boulevard Lascrosses BP 7010 31068 Toulouse Cedex 7 France Tel: + 33 (0)5 61 29 48 41 Fax: + 33 (0)5 61 29 49 94 E-mail: j. Organizational commitment is likely to be most improved through HRD opportunities that lead to portable qualiﬁcations and transferable skills. Finally.winterton@esc-toulouse. work organization delimits the opportunity and necessity for work-based learning. but this has yet to be explored empirically through HRD practice. In building organizational commitment three further actions were proposed: establishing an appropriate organizational culture. however. mobility and adaptability. there is an apparent tension between building commitment through providing opportunities for training and development and reducing ease of movement through training in ﬁrm-speciﬁc skills. The tension can perhaps be resolved through ensuring that employees have a core of transferable skills. indeed. providing training towards portable qualiﬁcations may have little negative impact on ease of movement compared with the positive impact on commitment. working conditions and work organization.Winterton: A conceptual model of labour turnover and retention three areas were identiﬁed: remuneration. three areas were suggested: improved recruitment practices. HRD practice is affected by each of the proposed initiatives. in particular through ﬁnancial participation. European policy emphasizes the role of qualiﬁcations in promoting employability. Thus recruitment practice needs to anticipate the HRD activities planned. Since high trust is associated with high commitment. To alter employee perceptions (of alternative employment opportunities). but these are associated with ease of movement. The generic model outlined above has already been successfully used to develop a skills retention strategy in the UK clothing sector and is currently being piloted in the aerospace sector. actions were proposed to reduce the ease of movement of workers to other jobs. In this way. since training and development is intimately related to other HRM concerns. improving opportunities for training and development and introducing employee participation. The intention in publishing the underlying conceptual model is to encourage its adoption for developing practical labour retention initiatives in other sectors. Focusing on the mainstream HRD initiatives associated with the labour retention model.fr 383 .
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