Collective Turnover at the Group, Unit, and Organizational Levels: Evidence, Issues, and Implications

Studies of the causes and consequences of turnover at the group, unit, or organizational level of analysis have proliferated in recent years. Indicative of its importance, turnover rate research spans numerous academic disciplines and their respective journals. This broad interest is fueled by the considerable implications of turnover rates predicting broader measures of organizational effectiveness (productivity, customer outcomes, firm performance) as well as by the related perspective that collective turnover is an important outcome in its own right. The goal of this review is to critically examine and extract meaningful insights from research on the causes and consequences of group, unit, and organizational turnover. The review is organized around five major “considerations,” including (1) measurement and levels of analysis issues, (2) consequences, (3) curvilinear and interaction effects, (4) methodological and conceptual issues, and (5) antecedents. The review concludes with broad directions for future research

The Effects of Departmental and Positional Power on Job Evaluation Outcomes: A Dual-Level Analysis of Power and Resource Allocation

We replicate research from two separate power and resource allocation research streams to test whether job evaluation outcomes at a university are simultaneously susceptible to effects of power held at both the group (i.e., academic department) and individual (i.e., a job\u27s hierarchical position) levels. In doing so, we illustrate limitations of the dominant rational model of research in job evaluation and, more generally, how dual levels of analysis can illuminate the relationship between power and resource allocation. We then investigate whether departmental and positional power interact in the allocation of resources at both levels. Results from six years of job evaluation data indicate that job evaluation outcomes are highly susceptible to both departmental and positional power. Moreover, our results suggest that positional power moderated the effect of departmental power on group level job evaluation successes. Drawing on our dual-level analysis, we propose a new model of power, resource allocation, and the perpetuation of power

Rational and Coalition Models of Job Evaluation: Do More Powerful University Departments Have an Advantage?

Job evaluation research has, to date, focused on the individual as the unit of analysis. After approximately 50 years of study, evidence on the basic assumptions supporting job evaluation is still inconclusive. This study expands the research by employing organizational theory to the topic and studying job evaluation at the group level. Prior work on rational and coalition models of resource allocation is used to develop hypotheses that are tested with six years of job evaluation data from a university. The results support the coalition model and the conclusion that departmental power can affect job evaluation outcomes

Voluntary Turnover and Job Performance: Curvilinearity and the Moderating Influences of Salary Growth, Promotions, and Labor Demand

In this study we investigated the relation between job performance and voluntary employee turnover for 5,143 exempt employees in a single firm in the petroleum industry. As hypothesized, we found support for Jackofsky\u27s (1984) curvilinear hypothesis as turnover was higher for low and high performers than it was for average performers. Three potential moderators of this curvilinearity were examined in an attempt to explain conflicting results in the performance turnover literature and contradictory predictions from turnover models. As predicted, pay growth, promotions, and labor demand each differentially influenced the turnover patterns of low, average, and high performers. Most notably, paying high performers according to their performance predicted substantial decrements in turnover. A utility analysis indicated that the benefits of paying high performers according to their performance more than offset the costs and that such an approach was a superior strategy when compared to a more egalitarian pay growth policy

Why High and Low Performers Leave and What They Find Elsewhere: Job Performance Effects on Employment Transitions

Little is known about how high and low performers differ in terms of why they leave their jobs, and no work examines whether pre-quit job performance matters for post-quit new-job outcomes. Working with a sample of approximately 2,500 former employees of an organization in the leisure and hospitality industry, we find that the reported importance of a variety of quit reasons differs both across and within performance levels. Additionally, we use an ease-of-movement perspective to predict how pre-quit performance relates to post-quit employment, new-job pay, and new-job advancement opportunity. Job type, tenure, and race interacted with performance in predicting new-job outcomes, suggesting explanations grounded in motivation, signaling, and discrimination in the external job market

New Directions in Compensation Research: Synergies, Risk, and Survival

We describe and use two theoretical frameworks, the resource-based view of the firm and institutional theory, as lenses for examining three promising areas of compensation research. First, we examine the nature of the relationship between pay and effectiveness. Does pay typically have a main effect or, instead, does the relationship depend on other human resource activities and organization characteristics? If the latter is true, then there are synergies between pay and these other factors and thus, conclusions drawn from main effects models may be misleading. Second, we discuss a relatively neglected issue in pay research, the concept of risk as it applies to investments in pay programs. Although firms and researchers tend to focus on expected returns from compensation interventions, analysis of the risk, or variability, associated with these returns may be essential for effective decision-making. Finally ,pay program survival, which has been virtually ignored in systematic pay research, is investigated. Survival appears to have important consequences for estimating pay plan risk and returns, and is also integral to the discussion of pay synergies. Based upon our two theoretical frameworks, we suggest specific research directions for pay program synergies, risk, and survival

Voluntary Turnover and Job Performance: Curvilinearity and the Moderating Influences of Salary Growth and Promotions

[Excerpt] The relationship between job performance and voluntary employee turnover was investigated for 5,143 exempt employees in a single firm. As hypothesized, support was found for E. F Jackofsky\u27s (1984) curvilinear hypothesis, as turnover was higher for low and high performers than it was for average performers. Two potential moderators of the curvilinearity were examined in an attempt to explain conflicting results in the performance-turnover literature. As predicted, low salary growth and high promotions each produced a more pronounced curvilinear performance-turnover relationship. Most notably, salary growth effects on turnover were greatest for high performers, with high salary growth predicting rather low turnover for these employees, whereas low salary growth predicted extremely high turnover. Additionally, once salary growth was controlled, promotions positively predicted turnover; with poor performer turnover most strongly affected

Unit-Level Voluntary Turnover Rates and Customer Service Quality: Implications of Group Cohesiveness, Newcomer Concentration, and Size

Despite substantial growth in the service industry and emerging work on turnover consequences, little research examines how unit-level turnover rates affect essential customer-related outcomes. The authors propose an operational disruption framework to explain why voluntary turnover impairs customers’ service quality perceptions. Based on a sample of 75 work units and data from 5,631 employee surveys, 59,602 customer surveys, and organizational records, results indicate that unit-level voluntary turnover rates are negatively related to service quality perceptions. The authors also examine potential boundary conditions related to the disruption framework. Of three moderators studied (group cohesiveness, group size, and newcomer concentration), results show that turnover’s negative effects on service quality are more pronounced in larger units and in those with a greater concentration of newcomers

Is It Worth It To Win The Talent War? Evaluating the Utility of Performance-Based Pay

While the business press suggests that “winning the talent war,” the attraction and retention of key talent, is increasingly pivotal to organization success, executives often report that their organizations do not fare well on this dimension. We demonstrate how, through integrating turnover and compensation research, the Boudreau and Berger (1985) staffing utility framework can be used by industrial/organizational (I/O) psychologists and other human resource (HR) professionals to address this issue. Employing a step-by-step process that combines organization-specific information about pay and performance with research on the pay-turnover linkage, we estimate the effects of incentive pay on employee separation patterns at various performance levels. We then use the utility framework to evaluate the financial consequences of incentive pay as an employee retention vehicle. The demonstration illustrates the limitations of standard accounting and behavioral cost-based approaches and the importance of considering both the costs and benefits associated with pay-for-performance plans. Our results suggest that traditional accounting or behavioral cost-based approaches, used alone, would have supported rejecting a potentially lucrative pay-for-performance investment. Additionally, our approach should enable HR professionals to use research findings and their own data to estimate the retention patterns and subsequent financial consequences of their existing, and potential, company-specific performance-based pay policies

Creating a More Quit-Friendly National Workforce? Individual Layoff History and Voluntary Turnover

While Bureau of Labor Statistics data reveal that U.S. employers laid off over 33 million employees since 1994, virtually no research has addressed the behavior of layoff victims upon reemployment. In a first step, we investigate how layoffs shape voluntary turnover behavior in subsequent jobs. Utilizing a recently developed fixed effects specification of survival analysis, we find that a layoff history is positively associated with quit behavior. This effect is partially mediated by underemployment and job satisfaction in the post-layoff job. The remaining indirect effect is consistent with the notion that layoffs produce a psychological spillover to post-layoff employment, which then manifests in quit behavior.We also find that layoff effects on turnover attenuate as an individual’s layoffs accumulate and vary in magnitude according to the turnover “path” followed by the leaver