determinants of employee turnover intentions a review

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"DETERMINANTS OF EMPLOYEE TURNOVER INTENTIONS: A REVIEW" Shweta Jha 1 ABSTRACT Employee turnover has always been a matter of concern for organizations. A large degree of employee turnover is highly detrimental to both the organization as well as the employees. Turnover has an impact over the organization’s costs relating to recruitment and selection, personnel process and induction, training of new personnel and above all, loss of knowledge gained by the employee while on job. Additionally, it results in understaffing which in turn lead to decreased effectiveness and productivity of the remaining staff. Turnover may have a negative impact on the employee as well. The individual may loose non-vested benefits and may be a victim of the “grass looks greener” phenomenon. Most often, turnover intention is consequential to actual quitting behavior. Hence, it is imperative to understand the determinants of turnover intentions so as to arrest the outflow of key personnel and retain competitive edge. This paper reviews existing literature on employee turnover and turnover intentions in order to develop a composite view on the subject and suggest a remedial plan of action to defuse employees’ intentions to quit and augment their effectiveness. 1 Senior Lecturer, Apeejay School of Management, New Delhi

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"DETERMINANTS OF EMPLOYEE TURNOVER INTENTIONS: AREVIEW"

Shweta Jha1

ABSTRACT

Employee turnover has always been a matter of concern for organizations. A large

degree of employee turnover is highly detrimental to both the organization as well as the

employees. Turnover has an impact over the organization’s costs relating to recruitment

and selection, personnel process and induction, training of new personnel and above all,

loss of knowledge gained by the employee while on job. Additionally, it results in

understaffing which in turn lead to decreased effectiveness and productivity of the

remaining staff. Turnover may have a negative impact on the employee as well. The

individual may loose non-vested benefits and may be a victim of the “grass looks

greener” phenomenon. Most often, turnover intention is consequential to actual quitting

behavior. Hence, it is imperative to understand the determinants of turnover intentions so

as to arrest the outflow of key personnel and retain competitive edge. This paper reviews

existing literature on employee turnover and turnover intentions in order to develop a

composite view on the subject and suggest a remedial plan of action to defuse employees’

intentions to quit and augment their effectiveness.

1 Senior Lecturer, Apeejay School of Management, New Delhi

I.0 INTRODUCTION

Employee turnover may be understood as the employee leaving the organization or

profession voluntarily. It has been observed that voluntary turnover is an interdisciplinary

and multidimensional construct. The problem of voluntary turnover stretches beyond the

gamut of employee and organization. The concept of voluntary turnover can be

explicated only when it is accepted as a combination of social, economic, and

psychological processes (Udechukwu et al., 2007). Further, studies indicate that

voluntary turnover is an upshot of employee initiating the termination of their employee-

organization relationship (see Lambert, 2001, for example). Additionally, various models

on turnover behaviour indicate the multistage nature of the term and suggest that it

includes attitudinal, decisional, and behavioural components (Parasuraman, 1989; Price

and Muller, 1981; Weisman et al. 1980).

Academics have been interested in turnover intention of employees as precursor of

turnover behaviour for the last six decades. Early literature on turnover behaviour

indicated that the employees would initiate the process of termination of their relationship

with their employee/ organization/ profession only when there is perceived desirability to

do so and there is a perceived possibility of such ease of movement (March and Simon,

1958). This perceived desirability of termination of employee-employer relation is known

as turnover intention. Turnover intention may be defined as the individual’s intention to

voluntary quit the organization or profession. Intentions are important to study as they

predict an individual’s perception and judgement (Mobley et al., 1979). As such,

intentions are the most immediate determinant of actual behaviour (Ajzen and Fishbein,

1980). Researchers have testified that the turnover intention comprises of a sequence of

process viz., thinking of quitting, intentions to search, and intention to quit (Mobley

1982; Mobley et al. 1978). Thus, proactive measures may be adopted by the organization

to control the actual turnover, if it is aware of the turnover intentions of its employees.

Various studies, over the years, have been conducted and different models have been

proposed to explain turnover of employees. Different factors have been quoted in the

models to reason out the quitting behaviour of employees. However, every model

indicates one common factor –turnover intention –as the antecedent of actual turnover

behaviour. It is thus, imperative for the organizations to find out the reasons that trigger

turnover intention amongst its employees. An individual may have an intention to

immediately quit the organization or he may have intentions to quit the organization in

the near future. Similarly, an individual may have the intentions to quit the job, or quit

the organization, or quit his profession. Whatever be the intention, it is essential for the

organizations to understand the reasons for quitting behaviour of their employees so as to

curb their voluntary quitting behaviour.

Mobley et al. (1979) observed that the intention to quit is influenced by a battery of

factors namely organizational factors, individual employee characteristics, job-related

and labour-market expectations, and individual values. The intention to quit then

ultimately influences the actual quitting behaviour. The present paper intends to study the

various factors influencing turnover intentions amongst employees by classifying them

into two broad categories viz. individual factors and organizational factors. Factors

moderating the relationship between individual/organizational factors and turnover

intentions have also been examined at length.

II.0 INDIVIDUAL FACTORS

Individual factors leading to turnover intentions refer to the personal characteristics of an

employee. These characteristics could be those which are ingrained in the individual,

such as personality, or those which are learnt, such as skill, ability etc. Studies indicate

that various cognitive and non-cognitive factors do influence, directly or indirectly, an

employee’s intention and then finally the decision to actually quit the organization.

Stagner (1948) defines personality ‘as the organization within the individual of those

perceptual, cognitive, emotional and motivational systems which determine his or her

unique responses to the environment’. Friedman & Rosenman’s (1959) theory of Type A

& Type B personality motivated researchers to unearth the relationship between

personality and turnover intentions among individuals. However, no significant

relationship between personality and turnover intentions could be established (Dole et al.,

2001).

However, further researches on personality traits showed a considerable relationship

between dispositional traits and turnover intentions (Chiu et al., 2003). Here,

dispositional traits may be understood as the orientation through which an individual

evaluates and responds to a situation using a uniform and a constant way of thinking,

feeling and behaving. Judge et al. (1977) have confirmed that dispositional traits of

positive and negative affectivity can be considered as personality traits. The study

provided evidence indicating that positive affectivity is negatively associated with

turnover intention whereas negative affectivity is neither positively nor negatively

associated with turnover intentions.

Different studies bear out that personality influences the perception of an individual.

Perception in turn may be defined as the process of obtaining, choosing, sorting,

interpreting, checking and reacting to sensory stimuli or data (Pareek, 2008). Academics

have tried to investigate the relationship between perception and employees intentions to

quit the organization. Perceived organizational support (POS) is found to be a definite

antecedent of employee turnover (Eisenberger et al. 1986). A further research on this

issue confirmed that individuals scoring high on POS have a low tendency to look out for

new jobs or accept jobs in other organizations (Eisenberger et al. 1990). Even though

POS is found to be negatively associated with employee turnover intentions, the

relationship established is minimal and further research on this issue needs to be done

(Allen et al. 2003; Griffet et al. 2000; Rhoades et al. 2001Wayne et al. 1997).

Organizational justice –an upshot of individual’s perception –also plays an important role

in quitting intention of an employee. Organizational justice refers to the overall

perception of what is fair in the workplace and is composed of distributive justice,

procedural justice, and interactional justice. Researchers have tried to investigate the

relationship between organizational justice and turnover intentions of employees. A few

studies reveal that individuals tend to discontinue their relationship with their employer/

organization if they perceive that there is low distributive justice i.e. they feel that the

employer/ organization is practicing inequity (Hendrix et al., 1998; Hom et al., 1984). In

fact, distributive justice was observed to have a significant effect on the employees

quitting intentions (Fields et al. 2000). Additionally, procedural justice was found to be

negatively related to actual turnover (Cohen et al. 2001; Dailey et al. 1992). However, a

few studies indicated contrary to be true, that is, there existed negative relationship

between turnover intention and both procedural and distributional justice (Loi et al.

2006). Another study disclosed that the perception of organizational justice had an

influence on work outcomes. A low degree of turnover intention was observed on

employees who showed positive feelings towards procedural and distributive justice

(Elanain Abu, 2010).

Going beyond the cognitive factors, researchers tried to find out the relationship between

non-cognitive factors like ability, gender, number of years of experience, etc on the one

hand and turnover intentions amongst employees on the other. Ability refers to the

capacity of an individual to perform tasks on a job. The overall ability of an individual is

essentially composed of two sets of factors: intellectual ability and physical ability.

Jackofsky & Peters (1983) hypothesized that ability has an indirect and multifaceted

effect on the desirability of movement. Further, the model hypothesized that as people

with high ability are dissatisfied working on routine tasks, they have a high desirability to

move to an alternative job. However, a further study on Jackofsky & Peter’s (1983)

model showed that ability has only a marginal effect on an individual’s perceived

desirability of movement from his current organization (Rosse, 1987).

Scholars have also attempted to explore a connection between ethnicity, gender,

personality, and hierarchical position on the one hand and turnover intentions on the

other. The obtained results however negated any such connection (Dole et al. 2001;

Mynaatt et al. 1997).

III.0 ORGANIZATIONAL FACTORS

Gone are the days when people worked in the organizations to satisfy their financial

needs. People need more than pay giving, credence to the dictum –man does not live by

bread alone. Herzberg (1966) in his two-factor theory of motivation, mentioned an array

of factors like achievement, recognition, work itself, responsibility, possibility of

advancement, salary, possibility of growth, job security, interpersonal relationship,

technical supervision, agreement with company policy, administration, work condition,

and personal life, that impacts job satisfaction, which in turn influences an employee’s

intentions to stay or quit his organization. Obviously, organizational factors play a crucial

role so far as employees’ turnover intentions are concerned.

Job stress is a major organizational factor that augments quitting intentions of employees.

Job-stressors, such as role ambiguity, role-conflict, work-over-load, and work-family

conflict, create stress among employees. Wunder et al. (2001), in his research found job-

stressors to have a direct and negative effect on the managers’ job satisfaction, which,

resulted in reduced organizational commitment that led to intentions of quitting and

finally the actual quitting from organization. Further, Firth et al. (2004) found that the

intentions to quit were highly influenced by job dissatisfaction, lack of commitment to

the organization, and feeling of stress. These factors were influenced by job-stressors.

However, Igbaria et al. (1992) observed that stressors do not have a direct influence on

intentions to quit. They indirectly influence turnover intentions through experience of job

stress, lack of social support, job dissatisfaction, and lack of commitment to the

organization. This result was reinforced by several other scholars (Armstrong-Stasen et

al. (1994); Koeske & Koeske, 1993; Tinker & Moore, 2001).

Maslow (1954) in his need hierarchy theory of motivation introduced the concept of

social needs. An employee in his organization looks towards his superiors, subordinates,

and peer group to satisfy his social need or for social support. Studies have found social

support to play an important role in mitigating intentions to quit. Moore (2002) observed

that social support from supervisors reduced their burnout levels, and this effect,

indirectly diminished their turnover intentions. A further study on nurses proved that

supervisory support not only reduced the two components of burnout, namely

depersonalization and emotional exhaustion, but also directly or indirectly, reduced their

turnover intentions (Kalliath & Beck 2001). The relationship between supervisory

support and turnover intention was also testified by a few researchers (Hatton et al., 1998;

Munn et al., 1996). Additionally, a research on retail salesmen also consolidated the

relationship between support from managers and turnover intention (Firth et al. 2004).

However, a few studies have also observed that social support had no moderating effect

in the relationship between-job stressors and intention to quit (Rahim et al. 1996).

Even the gender of supervisor was found to have a significant impact on employees’

intentions to quit. In a large-scale survey of 12,000 young working Americans, it was

observed that employees, who had a female manager perceived relatively reduced job

responsibility and had higher job search intentions as compared to those employees who

had a male manager (Valentine et al. 2001). There is a greater need to look at the issue of

turnover intentions vis-à-vis gender in Europe, Australia and Asia as well where we do

not have enough literature available.

Social comparison is another organizational factor that might fuel turnover intentions as

well. Festinger (1954) in his self-comparison theory expounded the motive of an

individual to compare his abilities with those of others. Major et al. (1984) defined social

comparison as a group to which an individual refers to while comparing issues

concerning his career. Employees tend to compare himself with people above him and

below him in the hierarchy in order to evaluate his own performance (Major et al. 1991;

Sheppard et al. 1992). A study on association between social comparison and turnover

intentions revealed a negative relationship between downward comparison and turnover

intentions. Additionally, downward comparison was found to be positively related to

career satisfaction. Conversely, upward comparisons were observed to be positively

associated with both turnover intentions and career satisfaction (Eddleston, 2009).

McGee (1971) observed that the job changing decision of individuals was largely

influenced by intrinsic factors namely nature of work opportunities for professional

growth that could be obtained through compatible work activities and colleagues.

Additionally, a study done on Norwegian university staff revealed that the factors which

influenced an individual’s decision to change job were collegial relations (relations

between colleagues), nature of work, and opportunities for professional development. Out

of the three factors, collegial relations had a major influence on the quitting decision of

staff. Further it was also established that the staff who found his work relatively less

intrinsically satisfying had a high intention to leave the organization. Job satisfaction also

had a major role to play in predicting intention to leave (Manger et al., 1990).

Pay satisfaction, turnover intentions and actual turnover are also connected to some

extent although such associations have been vehemently opposed as well. Motowidlo

(1983) observed that pay has an influence over turnover only through its effect on pay

satisfaction, which in turn, impacts turnover only through its effects on turnover

intentions. Additionally pay satisfaction was observed to affect turnover intention both

directly as well as indirectly (Lum et al. 1998). Although Herzberg’s two-factor theory on

motivation mentioned salary as hygiene factor, the absence of which would produce

dissatisfaction, not may studies portray significant relationship between pay and turnover

intention. Finkelstein (1984) observed that quitting decision was not influenced by

extrinsic factor like income. Newman (1974) in his study on nurses, found an

insignificant relationship between pay satisfaction and turnover intentions. Various other

studies on nurses reflected that factors like satisfaction with work, coworkers, and

supervision had a significant effect over commitment, which in turn influenced turnover

intentions, whereas pay satisfaction had no role to play in influencing organizational

commitment (Bateman & Strasser 1984).

Organizational culture is an important factor having tremendous bearing on employees’

turnover intentions. Denison (1996) defines organizational culture as the embedded

structure of organizations, which is rooted in the values, beliefs, and assumptions held by

organizational members. Organisational culture has five dimensions viz., job challenge,

communication, trust, innovation, and social cohesion (Zeitz et al. 1997). Indeed,

employees’ withdrawal behaviour and turnover intentions, to some extent, are the

consequential to organizational culture. Organizations having a culture of providing

challenging job reduce employees’ burnout and thus diminishes their turnover intentions

from job, organization, and occupation. Additionally, organizations providing a culture of

innovation also has a decreased number of employees who intend to quit the organization

(Carmeli 2005).

IV.0 MEDIATING FACTORS

Different studies on turnover intentions show that in most of the cases individual and

organizational factors affect variables like commitment, job satisfaction, personal agency,

self-esteem etc, which in turn influences the turnover intentions. These factors may be

considered as mediating factors.

Mobley (1977 first proposed a model explaining the relationship between job satisfaction

and thoughts of quitting which, ultimately led to actual turnover. Later Price & Muller

(1981) observed that job dissatisfaction influenced actual turnover indirectly through its

direct effect on turnover intention. The variables that affect job satisfaction are pay,

promotion opportunities, immediate supervisor, fringe benefits, contingent rewards, rules

and procedures, relation with co-workers, type of work done, and communication within

the organization (Spector 1997). In his research Weisman et al. (1980), observed factors

like understaffing and inflexible work schedules as reasons behind job dissatisfaction.

Williams and Hazer (1986) differentiated between job satisfaction and commitment by

explaining the former as an emotional reaction to specific aspects of job and the latter as

an emotional reaction to the whole organization. Both the individual factors as well as the

organizational factors influence organizational commitment which eventually influences

turnover intentions amongst employees.

Personal agency is found to mediate the relationship between job-stressors and turnover

intention. Personal agency may be understood as a personal factor that includes concepts

such as powerlessness, locus of control and personal control. An employee having a

higher sense of personal agency has lesser risk of negative outcomes succeeding a major

negative life events and role related stress (Turner and Roszell 1994). Locus of control

mediates the relationship between job-stressors and turnover intentions (Rahim et al.

1996). Locus of control is also found to be positively related to job satisfaction (Sujan,

1986).

Further, self esteem is also found to be a mediating factor between job-stressors and

turnover intention. Self esteem may be understood as the assessment that an individual

makes and maintains about himself. Individuals scoring low on self esteem are prone to a

variety of psychological problems, unemployment, and subsequent maladaptive

behaviour (Kaplan 1975, 1980; Silverstone 1991; Waters and Moore 2002). Subsequent

studies on self esteem reveals that it is correlated with job satisfaction (Greenhaus and

Badin, 1974; Inkson, 1978; Kohli 1985; Teas 1981, 1982)

V.0 CONCLUSION

Employees are asset to an organization who can actually make all the difference so far

firm’s competitive edge is concerned. Employee turnover to some extent is desirable and

accepted as it brings about a constructive change in the organization. However, too many

employees intending to leave the organization is undesirable. Voluntary quitting of start

performers is dysfunctional turnover which the firms always want to stop. Intentions

reveal a lot about an individual’s perception, judgment, and behaviour. Studies show that

turnover intentions precede the actual turnover behaviour of employees. If the

organisations want to reduce turnover, then it is imperative for them to understand the

factors which trigger turnover intentions or quitting intentions in employees.

In this review paper, individual, organizational and mediating factors contributing to

employee turnover intentions have been analyzed. Whereas no single factor can be

attributed to turnover intentions, it is advisable to take a holistic approach towards

handling employee turnover issue in any organization. None of the factors can influence

turnover intentions in isolation. Hence remedial measure should also have a composite

framework.

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