How Organizations Can Reduce Employee Turnover

On By I-O AT WORK
Topic(s): job performance, turnover
Publication: Journal of Applied Psychology
Article: Retaining your high performers: moderators of the performance – job satisfaction – voluntary turnover relationship
Authors: A. Nyberg
Reviewed by: Bobby Bullock

When high performers leave an organization out of dissatisfaction or because of a better offer, the organization loses out big. A recent study (Nyberg, 2010) examined some of the mechanisms that influence the relationship between employee performance and voluntary turnover. In general, high performing employees are less likely to leave their organizations voluntarily.

THE RESEARCH STUDY

In this study, the author found that pay growth and promotion rates both strengthened the performance-voluntary turnover relationship. When pay and promotions were greater, high performers were less likely to leave than when they were lower. Another important finding was that high performers were less likely to be influenced by the current economic situation. In other words, because high performers are more desirable in the job market, their intentions to stay with an organization are less effected by competition. Pay growth and unemployment rates influence the relationship regardless of job satisfaction. Although these findings seem like common sense, they still hold important insights for organizations right now, especially when considering the costs associated with an organization losing its strongest employees.

PRACTICAL IMPLICATIONS

The author of this study noted the following implications:

  • Organizations should place more attention on the pay growth rates of high performers, as it affects their intentions to leave more so than for lower performers.
  • Because pay growth influences voluntary turnover above and beyond job satisfaction, high performers are more likely to leave if they get a better job offer, regardless of whether or not they are happy with their job.
  • To retain high performers, managers should keep vigilant even in a poor job market. In fact, the author found that high performers are more likely to leave when the job market is poor than when it is good.

 

Nyberg, A. (2010). Retaining your high performers: Moderators of the performance – job satisfaction – voluntary turnover relationship. Journal of Applied Psychology, 95(3), 440-453.

Image credit: Unsplash+