Da Mylene Perez (1)
Transcript of Da Mylene Perez (1)
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TURNOVER INTENT
DIPLOMA THESIS
Department: Strategie- und Unternehmenskonomik
University of Zurich
Human Resource Management
Professor Dr. Bruno Staffelbach
Supervising tutor: Dorothea BrunnerSubject area: BWL I
Subject: Human Resource Management
Author: Mylene Perez
Schracherstr. 14a, 8306 Brttisellen
Student ID Number: 02-728-285
Field of Study: BWL (Business Administration)
Number of Semester: 10
Brttisellen, 18.06.2008
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ABSTRACT
Voluntary employee turnovers incur significant cost for an organization. Thus it is important to
identify turnover intents as early as possible in order to enable planners to help implement
courses of action. Within the scope of this diploma thesis a review of literature on turnover intent
is offered. Initially the importance of the phenomenon is established and exact definitions of the
subject area are presented. Subsequently the potentially critical impact of turnover behavior on
organizational effectiveness is discussed. Several theoretical concepts that explain the occurrence
of the turnover intent, and five key models that shaped the research on turnover, are presented
and partially critiqued. This study also analyzes the effect of various factors on turnover intent
using data from the HR-Barometers 2007. These factors were categorized into psychological,
economical and demographic determinants, as well as moderating factors. The results revealed
that the psychological determinants, such as psychological contract and job satisfaction, were the
strongest significant predictors of future quits.
Freiwillige Kndigungen von Arbeitnehmenden sind fr Unternehmen mit sehr hohen Kosten
verbunden. Es ist daher von zentraler Bedeutung die Kndigungsabsichten schon frhzeitig zu
erkennen, um ihren Ursachen entgegen wirken zu knnen. Im Rahmen dieser Diplomarbeit wird
ein Literaturberblick ber Kndingsabsichten aufgezeigt. Zunchst einmal wird die Relevanz
dieses Phnomens erklrt und dann werden verschiedene Begriffe von diesem Themenbereichdefiniert. Danach werden potenzielle und kritische Auswirkungen des Kndigungsverhaltens auf
die Effektivitt der Unternehmen untersucht. Einige theoretische Konzepte, welche die
Entstehung von Kndigungsabsichten erklren, wie auch fnf entscheidende Modelle, welche die
Forschung ber Kndigungen geprgt haben, werden vorgestellt und zum Teil kritisch analysiert.
Diese Arbeit untersucht auch verschiedene Ursachen von Kndigungsabsichten, dies mittels
einer empirischen Analyse der Daten des HR-Barometers 2007. Die Ursachen wurden in
psychologische, konomische und demographische Determinanten, sowie Moderatoren
unterteilt. Es wird gezeigt, dass psychologische Determinanten, wie der Psychologische Vertrag
und Arbeitszufriedenheit, die strksten Prdiktoren von zuknftigen Kndigungen sind.
Keywords: TURNOVER INTENT, VOLUNTARY TURNOVER, JOB MOBILITY
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Contents
1. Introduction............................................................................................................................... 6
1.1. Starting Position...................................................................................................................... 6
1.2. Turnover in Switzerland........................................................................................................... 6
1.3. The Purpose of the Study......................................................................................................... 8
1.4. Procedure................................................................................................................................ 9
2. Theoretical Background............................................................................................................ 11
2.1. Definitions........................................................................................................................ 11
2.1.1. Turnover................................................................................................................... 11
2.1.2. Turnover Intent.......................................................................................................... 14
2.2. Consequences of Turnover................................................................................................. 15
2.2.1. The Impact of Turnover on Organizational Cost........................................................... 15
2.2.2. Operational Disruption............................................................................................... 16
2.2.3. Demoralization of Organizational Membership............................................................ 16
2.3. Reference Theories Explaining Voluntary Turnover Intent Behavior.................................... 18
2.3.1. Social Exchange Theory............................................................................................. 18
2.3.2. Human Capital Theory............................................................................................... 18
2.3.3. Search Theory........................................................................................................... 19
2.3.4. Matching Theory....................................................................................................... 20
2.3.5. Equity Theory............................................................................................................ 20
2.3.6. Organizational Equilibrium Theory............................................................................. 21
2.4. Turnover Process Models.................................................................................................. 23
2.4.1. March & Simons Model............................................................................................ 23
2.4.2. Mobleys Model........................................................................................................ 25
2.4.3. Sheridan and Abelsons Model................................................................................... 26
2.4.4. Price and Muellers Model......................................................................................... 29
2.4.5. Lee and Mitchells Model........................................................................................... 31
2.4.6. Conclusion................................................................................................................ 33
3. Factors that have an Impact on Turnover Intent.......................................................................... 34
3.1. Determinants......................................................................................................................... 35
3.1.1. Psychological determinants........................................................................................ 36
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3.1.2. Economic determinants.............................................................................................. 42
3.1.3. Demographic determinants......................................................................................... 44
3.2. Moderators............................................................................................................................ 45
3.2.1. Gender...................................................................................................................... 46
3.2.2. Education.................................................................................................................. 46
4. Methodology............................................................................................................................ 48
4.1. Procedure.............................................................................................................................. 48
4.2. Data set: HR-Barometer 2007.............................................................................................. 48
4.3. Participants........................................................................................................................... 48
5. Results..................................................................................................................................... 51
5.1. Statistical Analysis............................................................................................................ 51
5.1.1. Psychological Determinants of Turnover intent............................................................ 51
5.1.2. Economic Determinants of Turnover intent................................................................. 53
5.1.3. Demographic Determinants of Turnover intent............................................................ 54
5.1.4. Integrated Model of Turnover..................................................................................... 55
5.1.5. Moderators................................................................................................................ 56
5.2. Discussion........................................................................................................................ 59
6. Summary................................................................................................................................. 62
6.1. Research results................................................................................................................ 626.2. Limitations....................................................................................................................... 63
6.3. Future Research................................................................................................................ 63
6.4. Conclusion....................................................................................................................... 66
7. References............................................................................................................................... 67
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Figure and Table Contents
Figure 1: Development of Turnover Rate 1996-2005 ..................................................................... 7Figure 2: Turnover Intent: An International Comparison ............................................................... 8Figure 3: Avoidability-Matrix ....................................................................................................... 13Figure 4: Simplified Version of March and Simons Model ........................................................ 24Figure 5: Mobleys Employee Turnover Decision Process Model ............................................... 26Figure 6: Sheridan and Abelsons Cusp-Catastrophe Model ........................................................ 28Figure 7: Price and Muellers Causal Model ................................................................................ 30Figure 8: Lee and Mitchells Unfolding Model ............................................................................ 32Figure 9: A General Illustration of Turnover ................................................................................ 34Figure 10: Turnover Intent Response-HR Barometer 2007 .......................................................... 49Figure 11: Turnover Intent by Industry HR-Barometer 2007 ....................................................... 50Figure 12: Gender Effect on the Relationship between Commitment and Turnover intent ......... 56Figure 13: Gender Effect on the Relationship between Job Satisfaction and Turnover intent ..... 57Figure 14: Moderator Education-Gender-Turnover Intent............................................................ 58
Table 1: Definition Voluntary and Involuntary Turnover ............................................................. 12Table 2: Relationship between Actual Turnover and Turnover Intent .......................................... 14Table 3: Several Categories of Expenses by Cascio ..................................................................... 16Table 4: Determinants for Voluntary Turnover Subdivided into Categories ................................ 35Table 5: Bipartisan Expectations................................................................................................... 37Table 6: Regression Psychological Determinants of Turnover Intent .......................................... 52Table 7: Regression Determinants of Job Satisfaction.................................................................. 53Table 8: Regression Economic Determinants of Turnover Intent ................................................. 54Table 9: Regression Demographical Determinants of Turnover Intent ........................................ 54
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Table 10: Regression Integrated Model of Turnover Intent .......................................................... 55Table 11: Regression Moderator Education-Age-Turnover Intent ............................................... 58
List of Abbreviations
e.g. = Exempli Gratia (for example)
et al. = Et alii (and others)
HR = Human Resource
ISSP = International Social Survey Program
p. = Page
SAKE = Schweizerische Arbeitskrafterhebung
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1. Introduction1.1. Starting Position
As several authors point out (e.g. Price, 2001/Hom&Griffeth, 1991), turnover is one of the most
researched phenomena in organizational behavior. In this research, as it is typical for most
studies on turnover, the focus was on members leaving rather than entering the organization,
furthermore the attention was on voluntary turnovers. The broad range of turnover studies is
indicative of the significance and complexity of the issue. The phenomenon attracts interest due
to its psychological dimension, its organizational significance, and its economic dimension.
A topic strongly related to voluntary job mobility is turnover intention. In this study turnover
intent rather than turnover was used as the dependent variable. The importance of analyzingturnover intention draws upon a number of recent research papers (e.g. Mobley, 1977/
Hom&Griffeth, 1991) that have assessed its role in forecasting and understanding actual quits.
Turnover intention was reported to be highly correlated with actual turnover.
Voluntary turnovers create significant cost, both in terms of direct cost, such as replacement, or
in terms of indirect cost, such as the pressure on remaining staff or the loss of social capital
(Staw, 1980). Explanation of voluntary turnover has relevant implications for organizational
manpower planning. It is important to identify turnover intent as early as possible in order toenable planners to help implementcourses of action.
1.2. Turnover in Switzerland
The turnover issue also plays a major role in Switzerland. The most recent study about job
mobility in Switzerland was conducted by Henneberger and Sousa-Poza in 2007. They revealed
that the macroeconomic turnover rate tends to follow the economic trend (Hennberger&Sousa-
Poza, 2007: p. 17). It has increased since the mid-90s until 2000 (with the lowest rate in 1997,
where unemployment showed the highest rate). It remained at the same stage for the next two
years, and subsequently decreased since 2002. This development is illustrated in Figure 1. Their
empirical examination was based on SAKE (Schweizerische Arbeitskrafterhebung) and thereby
resulted a turnover rate of 9.7% in year 2005. Therewith around 300000 employees in
Switzerland are yearly changing their job (Henneberger & Sousa-Poza 2007: p. 17).
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Disaggregated by industry, the results showed that the turnover rate is particularly high in the
hotel and restaurant industry as well in the area of real estate, renting, information
technology. The lowest rate is registered in public industry (Henneberger & Sousa-Poza
2007: p. 82).
Figure 1: Development of Turnover Rate 1996-2005
(SAKE in Henneberger&Sousa-Poza, 2007: p. 33)
An international comparison of turnover intent based on the International Social Survey Program
(ISSP) about Work Orientations in 2005 is illustrated in Figure 2. The question was How
likely: try to find a job within the next 12 months. The results showed that Switzerland has a
quota of 8.74%, which is 1.21% percentage point below the average turnover rate of 9.95% of all
the 32 analyzed countries (see Figure 2). Particular high turnover rates resulted next to France
(17.48%) and Mexico (17.42%), USA (15.08%), Dominican Republic (14.63%), New Zealand
(14.47%) and Australia (14.26%). Low turnover rate was shown in Japan (3.74%) and Czech
Republic (3.11%). The low rate in Japan can be explained by the prevalent lifelong employment
relations (Henneberger&Sousa-Poza 2002: p. 100).
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Although Switzerlands turnover rate has declined over the past years, it would be too early to
argue that this could be a persistent trend. This still needs to be observed during the following
years. Thus the turnover issue remains to be important in Switzerland.
Figure 2: Turnover Intent: An International Comparison
(ISSP 2005)
1.3. The Purpose of the Study
Owing to the importance of job mobility in the Swiss labor market, turnover became an
important issue for the HR-Management. Since voluntary turnovers implicate various
consequences, it is necessary to detect them at an early stage. Preventing unintentional job
mobility can be accomplished by understanding turnover intent, since it has been examined as
the immediate precursor to actual turnover. Revealing turnover intent can help forecasting actual
quits.
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There are well established traditions of using models in research and dispersion of theory about
turnover behavior. Several theories and key models need to be discussed, in order to understand
reasons and backgrounds of this phenomenon. Therefore one purpose of this study is:
a) To examine several theories, how they describe and explain reasons for turnover,respectively turnover intention.
When it comes to interpreting turnover behavior and understanding the enormous impact the
issue discussed, several factors on turnover intent have to be examined. Based on theoretical
backgrounds, these factors need to be evaluated with an empirical analysis. The second purpose
of this study is:
b) To conduct an empirical derivation of factors that have an impact on turnover intent ofSwiss employees based on the HR Barometer 2007.
1.4. Procedure
The aim of this study is to provide an overview about the theoretical background of turnover
intent. Additionally an empirical analysis, based on the HR Barometer 2007, needs to be carried
out in order to understand the different impact of factors on turnover intent. The present study is
structured in six chapters, which is illustrated on the following page.
The first chapter provides an introduction of the topic. Initially the importance of the subject area
is established. The purpose is being defined and the procedure becomes apparent. The second
chapter offers a theoretical background of the turnover phenomenon, starting with exact
definitions followed by the presentation of the potentially critical impact of turnover behavior on
organizational effectiveness. Further, theoretical concepts will be presented and then related to
the occurrence of turnover intent. Established models that have shaped the turnover research are
discussed and critiqued. In the third chapter, factors that have an impact on turnover intent are
categorized into psychological, economic and demographic determinants as well as moderating
variables. An empirical analysis, based on HR-Barometer 2007, will be conducted in order to
evaluate the different suppositions. The final chapter implies a summary of the core findings and
offers suggestions for future investigations.
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1.Introduction- Starting Position
- Turnover Intent in Switzerland
- Purpose of the Study
- Procedure
2.Definitions 3. Consequences of Turnover- Turnover - Impact on Organizational Cost
- Turnover Intent - Organizational Disruption
- Demoralization of Organizational membership
4. Reference Theories- Explaining turnover behavior with established theories
5. Turnover process- Presenting key models that shaped the turnover research
6. Factors- Determinants
Based on HR Barometer 2007
- Moderators
7. Empirical Analysis based on HR Barometer 2007
8. Overall Summary and Future Research
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2. Theoretical Background2.1. Definitions
2.1.1.
Turnover
Turnover is defined as the individual movement across the membership boundary of an
organization (Price, 2001: p. 600). The concept individual refers to the employees within an
organization and the notion of movement can be interpreted either as an accession or a separation
of the company. In turnover literature, authors also used other labels for turnover, such as quits,
attrition, exits, mobility, migration or succession. A crude measurement of turnover would be
(Morrell et. al, 2001: p. 10):
Leavers in year
x 100
Average number of employees during year
However, this measurement of turnover is rarely used, since it fails to distinguish between cases
where individuals have decided to leave and cases where they had to leave, as well as ignoring
the reasons why they leave is important to consider (Morrell et al., 2001: p. 10). Therefore three
fundamental characteristics of turnover will have to be discussed: voluntariness, avoidability and
functionality. It should be emphasized that this studys concern would be the voluntary,
avoidable and dysfunctional turnover.
Voluntariness
Since turnover is often associated with variables, such as job satisfaction, it is important to
distinguish voluntary from involuntary turnover, otherwise the estimation of such a relationship
in terms of all leavers will be inaccurate. Most of the researches attention was concentrated on
the members, which voluntarily leave the organization, since most of the turnovers are voluntary
and subject to control by managers (e.g. Morrell et al., 2001/Price, 2001). Managers focus their
attention on aphenomenon capable of some degree of control. A wide range of determinants
have been found useful when it comes to interpreting voluntary turnover. It is known that a high
amount of voluntary turnover adversely affects organizational effectiveness.
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Table 1: Definition Voluntary and Involuntary Turnover
Types Definition Examples
Voluntary turnover ..voluntary cessation of membership of
an organization by an employee of that
organization.(Morrell et al., 2001: p. 6)
Resignation
Involuntary turnover ..movement across the membership
boundary of an organization, which is
not initiated by the employee. (Price,
1977: p. 9)
Dismissal Retrenchment Death
Avoidability
Another important consideration for the organizational concern is the avoidability of voluntary
turnover. It deals with the question whether the decision to leave could have been prevented by
the organization. This is important for the planning of interventions. For instance, if a company
identifies their voluntary turnover is unavoidable (e.g. relocation by a spouse), it would be more
beneficial to manage turnover post hoc, rather than to spend on theorized preventive measures,
such as increasing pay. These losses of employees can also be described as necessary
causalities (Morrell et al., 2004: p. 164). In this case, managers focus on minimizing the
disruption and inconvenience of the lost. Yet, if the reason for voluntary turnover is avoidable,
then managers have the possibility to intervene in order to prevent the cessation. Unfortunately a
pure split is not feasible. When managers sometimes assume turnovers being inevitable, but in
real terms are avoidable, they may fail to detect underlying issues in the organization. The
associated costs of the lost of employees may be unnecessary tolerated, whereas prevention have
been more beneficial. In contrast when the perceived voluntary turnover is seen as avoidable, but
in reality it was unavoidable, managers could spend money on useless prevention measures
(Morrell et al., 2001: p. 9). This is illustrated in Figure 3.
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Figure 3: Avoidability-Matrix
(Morrell et al., 2001: p. 60)
Functionality
Most studies on turnover have associated turnover with a negative impact on organizational
effectiveness. Dalton et al. (1981) modified this perspective. Their study distinguished two types
of leavers, in terms of their productivity and the extent to which they are an asset to the
organization (Morrell et al., 2001: p. 12). It shows that turnover can also be beneficial for an
organization. An example for a functional turnover would be the replacement of unproductive
employees with productive ones, thus dysfunctional turnover would be interpreted as losing
productive employees. For managers it is important whether a turnover brings an opportunity to
gain more productive employees (for functional turnover) or forces them to reorganize current
work settings (for dysfunctional turnover). (Morrell et al., 2001: p. 12)
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2.1.2. Turnover IntentUnlike actual turnover, turnover intent is not explicit. Intentions are a statement about a specific
behavior of interest (Berndt, 1981: p. 636). Turnover intent is defined as the reflection of the
(subjective) probability that an individual will change his or her job within a certain time period
(Sousa-Poza&Henneberger, 2002: p. 1) and is an immediate precursor to actual turnover. A
broad range of literature examining the relationship of turnover intent and actual turnover (e.g.
Mobley, 1977/ Hom&Griffeth 1991) exists. Actual intention and turnover intentionhave been
measured separately; however, actual turnover is expected to increase as the intention increases.
The results of the different studies provide support for the high significance of turnover intention
in investigating the individuals turnover behavior. Turnover intention captures the individual's
perception and evaluation of job alternatives (Mobley et al., 1979).
In Henneberger and Sousa-Pozas study, it resulted that the decision on job mobility is rather
been made by employees in the short run (Hennberger&Sousa-Poza, 2007: p. 20). Not all
employees who intended to change their job had an actual turnover. On the contrary, employees,
who did not intend it, had actual turnovers (see Table 2). It shows that, on the one hand,
employees react quite sensitive to sudden appeared options; on the other hand, employers should
be able to prevent successful employees from job mobility.
Table 2: Relationship between Actual Turnover and Turnover Intent
No Job Mobility Job Mobility Total
Turnover intent not
announced in 2004 95.39% 4.61% 90.48%
Turnover intent
announced in 2004 74.81% 25.19% 9.52%
93.43% 6.57% 100%
Note: Spearman-Correlation coefficient = 0.2343 (1% significance level)
(SAKE 2004/2005-Henneberger&Sousa-Poza, 2007: p. 102)
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2.2. Consequences of TurnoverThe purpose of this chapter is to discuss the different consequences of turnover and to point out
turnover as a crucial organizational issue. Although turnover may also bring positive
consequencesfor instance the reallocation of organizational resources (Staw, 1980: p. 258), this
studys focus will be on negative consequences of turnover. Three important negative
consequences, which have an impact on organizational effectiveness, will be discussed below:
the impact on organizational cost, operational disruption and demoralization of organizational
membership.
2.2.1. The Impact of Turnover on Organizational Cost
Organizational efficiency has been shown to be highly correlated with a low turnover rate.Studies dealing with the impact of turnover are dominated by a concern with organizational
effectiveness, which is defined as the extent to which the system achieves its goals (Price,
1977: p. 110). The financial impact of turnover is usually expressed in monetary terms. Cascio in
1991 made the most significant contribution in this respect, discussing the extent to which
turnover cost are important (Tziner&Birati, 1996). Table 3illustrates his model that consists of
categories of expenses. According to Cascio, the summation of the components of the three
major categories should constitute the expense of an employee turnover (Tziner&Birati, 1996: p.
114).
Additionally, several other studies extended Cascios list with further categories. In Tziner and
Biratis study (1996) they argued that Cascio neglects to discuss the distinction between
functional and dysfunctional turnover, namely the cost of the reduced productivity of the new
worker during the period required for the level of performance of the previous employee to be
reached (Tziner, 1996; p. 114). If bad performers choose to leave, this could carry beneficial
outcomes for the organization. However, if it is a dysfunctional turnover, then the loss of an
esteemed employee can engender a loss of productivity. Another category is named the vacancy
costs that refers to the expenses that incurred due to increased overtime or temporary workers
that are employed to complete the tasks of the vacant position (www.uwex.edu).
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Table 3: Several Categories of Expenses by Cascio
Separation Cost the costs incurred for exit interviews administrative functions related to termination separation/severance pay
Replacement Cost advertising position availability in various media entrance interviews holding decision making meetings
Training Cost Norms of conduct and performance Disseminating relevant information for organizational
socialization
Participation in on-the-job training activities(Tziner et al, 1996: p.114)
2.2.2. Operational DisruptionOperational disruption occurs when high interdependence of work roles within the company
exists. The loss of key members in an organization which is characterized as being highly
interdependent and specialized can influence the ability of other remaining members to fulfill
their work task. In some companies higher turnover rate is expected to find in lower hierarchy
levels. Replacing these positions is not that difficult for the organization. The author argued that
the higher the level of position to be filled the greater the potential for disruption (Staw, 1980:
p. 256). This problem can be solved with back up personnel or employees can be trained with
multiplicity skills. (Staw, 1980: p. 256)
2.2.3. Demoralization of Organizational MembershipThe demoralization of organizational membership refers to the impact of turnover on attitudes of
the remaining members. If a person decided to leave for an alternative position in an external
environment, it may provoke a reflective sentiment with remaining members, such as
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questioning their own motivation to stay in the organization. Thus turnover can cause additional
turnover by stimulating deterioration in attitudes towards the organization. (Staw, 1980: p. 257)
The perceived reason of leaving is one essential factor for demoralization of organizational
membership. If the reason for quitting is a non-organizational matter, such as family issues or
location change, then the feeling of demoralization is less existent. Yet if the reason is rather
dependent on organizational dimensions, such as pay or supervisory support, then it will likely
lead to demoralization. If those who leave are members of a cohesive work group or possess
high social status among the organizational membership, then turnover will likely lead to greater
demoralization (Staw, 1980: p. 257).
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2.3. Reference Theories Explaining Voluntary Turnover Intent Behavior2.3.1. Social Exchange TheorySocial exchange theory is based on the idea that social behavior is the result of an exchange
process, whose purpose it is to maximize benefits and minimize costs. The beginnings of this
theory can be traced to the studies of Thibaut and Kelley, Homans and Blau (Brinkmann&Stapf,
2005: p. 24). The exchange can be understood in terms of material and non-material goods, such
as the symbols of approval or prestige (Homans, 1961: p. 12). According to this theory,
individuals considerpotential reward and risks of social relationships. Further it implies that all
human relationships are shaped by using a subjective reward-cost analysis and the comparison of
alternatives. Someone who gives much will expect to get at least the same amount back from
others and in return persons that receive a lot from others will be under pressure to give much
back to them. People will terminate or abandon the relationship as soon as the costs outweigh the
benefits (Farmer&Fedor, 1999: p. 352).
The viability of social exchange theory is based on the assumption that individuals recognize
ones life situations and notice each ones needs. It also refers to the principal of reciprocity,
whereby privileges granted by one are returned by the other. The interaction between humans
will be noticed consciously and in some way reciprocated. The willingness to generate an
advance performance will be responded with a payback, either soon or with a time delay.
(Brinkmann&Stapf, 2005: p. 24)
2.3.2. Human Capital TheoryThe core thesis of human capital theory is that humans learning functions are comparable with
other natural resources which are involved in the production process (Becker, 1993). The
theorys roots are in the work of Adam Smith or William Petty. Yet it was Gary Becker who
extensively developed the human capital theory in 1964. The concept of human capital claims
that not all work is equal and that the employees quality can be increased by investing in them
(Becker, 1993). According to Becker (1993), education and training are the most important
investment in human capital. Learning capacity is closely related to earning level, thus it can
raise a persons income. The earnings of more educated people are mostly above average. The
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education, experience and skills of a worker have an economic value for employers and for the
economy as a whole. It emphasized that effective employees have to be constant learners in order
to compete in an increasingly globally competitive enterprise environment. Hence occupational
wage differentials refer to the amount of investment in human capital (Henneberger&Sousa-
Poza, 2007: p. 53).
There are two major forms of human capital investment; schooling and on-the-job training.
Becker defined a school as an institution specializing in the production of training (Becker,
1993: p. 51), such as university or high school. On-the-job training relates to the increasing
productivity of employees by learning new skills and perfecting old ones while on the job
(Becker, 1993: p. 31). It can be distinguished between general and specific training. Training can
be seen as general, if the acquired skill can also be used in another company. For example, a
doctor trained in one hospital finds his skills also beneficial at other hospitals (Becker, 1993: p.
33); whereas specific training is defined as training that has no effect on the productivity of
trainees that would be useful in other firms (Becker, 1993: p. 40). The development of
capability requires both specialization and experience and can be gained partly from schools and
partly from companies.
Employees that possess a high amount of company specific training will hardly find alternatives
that meet their expectations, such as wages. Based on this theory, it can be assumed that
company specific training has an inverse relationship to turnover intent. The higher the
investments are on specific knowledge, the higher the considered transaction costs
(Henneberger&Sousa-Poza, 2007: p. 53).
2.3.3. Search TheoryThe search theory can be traced back to George Stiglers analysis how buyers (or sellers) acquire
information as an investment. He argued that a buyer (or a seller) who wishes to ascertain the
most favorable price must canvass various sellers (or buyers) (Stigler, 1961: p. 213). A special
concern in this study is the workers optimal strategy when choosing from various potential
opportunities in the labor market. The individual imperfect knowledge of labor market variables
requires the usage of a so called reservation price for the search of employment various
alternatives (Morrell et al., 2001: p. 23). Reservation price is defined as the lowest salary or
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wage at which a person will consider accepting a job and can be thought of as a short-hand
heuristic which people use to decide whether to accept / reject a job offer in the face of little
other information from the labor market (Holt and David, 1966 in Morrell et al., 2001: p. 23). It
is seen as endogenously determined, suggesting that it depends on opportunities in the labor
market (Morrell et al., 2001: p. 23).
For employees, search generates alternative positions or workplace outside the present
organization, which can lead to actual turnover. Therefore job search was detected as an
important precursor to quitting in several studies (e.g. Mobley et al., 1979). Job search can also
lead to the appreciation of ones present job after comparing it with the alternatives (Morrell et
al., 2001: p. 24).
2.3.4. Matching TheoryMatching Theory describes a process where humans or other organisms distribute their behavior
in relation to the rate of reinforcement for response alternatives (Mace, 1990: p. 197). It gives
an understanding about the appearance and the termination of a work contract under uncertainty.
Employees strive for those positions which match best with their capabilities that correlate with
appropriate wages. Employers tend to fill positions, so that they can maximize their benefit
(Henneberger&Sousa-Poza, 2002: p. 28). Employees productivity in a particular job is not
known in advance but rather appears precisely as the workers job tenure increases (Jovanovic,
1979). The benevolence of a match reveals in the course of the employment relationship.
Therefore younger employees launch an experimental stage at the beginning of their professional
life, where they gain experiences and diminish lack of information. In this context, job mobility
can be understood as a mechanism for correcting matching failures (Henneberger&Sousa-Poza,
2002: p. 28).
2.3.5. Equity TheoryEquity theory, also known as justice theory, was developed by John Stacey Adams in 1963 and
can be categorized in job motivational theory. It proposes that individuals determine whether the
distribution of resources is fair to both relational partners (Brinkmann&Stapf, 2005: p. 26). In
organization, the Equity theory of employee motivation describes the fair balance to be struck
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between an employees inputs, such as hard work, skill level, tolerance or enthusiasm and an
employees outputs, such as salary, benefits or intangibles issues. Justice is existent, when inputs
and outputs are fairly distributed among the participants, whereas the impartial criteria of the
situation are less important than the way, how individuals estimate the value and the relevance of
the inputs and outputs of the different participants (Brinkmann&Stapf, 2005: p. 26). Thus a
highly motivated employee perceives his rewards to be equal to his contributions. He will judge
to be treated fairly, when he feels that he is working and being rewarded at about the same rate as
his peers. It should be emphasized that factors can affect each persons assessment and
perception of their relationship with their relational partners differently; hence every employee
does not measure his contributions in the same way. According to Leventhal, employees evaluate
the fairness of the procedural justice regarding following criteria (Brinkmann&Stapf, 2005: p.
27):
The procedure must not contradict ethical standards. The allocation has to be applied consistently over time and people. Decisions have to consider the interest of everyone. The person, who uses the procedural method, should not be influenced by self-interest. The procedural method should contain correction possibility in order to revise decisions,
for instance through objection.
Based on the Equity theory, if an employee perceives the distribution of resources as unfair, then
turnover intent will emerge.
2.3.6. Organizational Equilibrium TheoryBarnard provided a systematic framework where he discussed human motivations that are
involved in the decision to belonging, which is also known as the organizational equilibrium. He
argued that the equilibrium of an organization means the capacity to maintain efficiency of an
organization (Mano, 1994: p. 17). Organizations are dependent on the continuity of
participants contributions and in order to maintain this, organizations have to offer equitable
inducements. Thus Barnards specific evolution is the decision to participate, in other words
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balancing of burdens by satisfactions which results in continuance (Barnard, 1938: p. 57).
According to Barnard, if the personal sacrifice is bigger than the inducements he gets, then the
person will withdraw his contributions and will leave the company.
Simon extended Barnards theory into the Barnard-Simon Organizational Equilibrium theory,
which builds on Barnards observations. Simon argued that the achievement of organizational
equilibrium contains the condition that the sum of contribution of all employees ensures the
kinds and quantity of necessary inducements (Mano, 1994: p. 18). However, he did not consider
the functions of the organization, such as the process of creation, transformation or exchange of
utilities where Barnard also placed his emphasis (Mano, 1994: p. 26).
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2.4. Turnover Process ModelsSeveral studies were already conducted that focused on developing and estimating a causal
model specifying the factors of voluntary turnover. The common theme which can be observed
from the following described models is that turnover behavior is a multistage process that
includes behavioral, attitudinal, and decisional components (Barak et al., 2001: p. 628). Five
turnover models are presented below, which are chronologically listed. These key models have
shaped the research on turnover behavior and therefore need to be discussed.
2.4.1. March & Simons ModelMany studies of voluntary turnover are to some degree descendants of the March and Simon
(1958) framework (e.g. Mobley, 1977/Lee et.al, 1999). Their model can be traced back toBarnard-Simons theory of organizational equilibrium where they argued that all employees
confront with decisions through their interaction with the company (Mano, 1994). A special
concern in this study is the decision to participate with the key variable desirability and ease
of movement in and out of the organization (Bowen&Siehl, 1997: p. 57). The theory specifies
that employees decision to resign is influenced by two factors: their perceived ease of
movement, which refers to the assessment of perceived alternatives or opportunity and
perceived desirability of movement, which is influenced for instance by job satisfaction
(Morrell et al., 2001: p. 34-35). This describes how balance is struck both for the organization
and its employees in terms of inducements, such as pay, and contributions, such as work, which
ensures continued organizational efficiency. When inducements are increased by the company,
this will lower the tendency of the worker to leave and vice versa (Morrell et al., 2001: p. 34).
Many limitations of March and Simons model exist. Their model more presents a static rather
than a procedural view of turnover. They also failed to include important variables that influence
the turnover process, such as role stress or different forms of organizational commitment
(Morrell et al., 2001: p. 35). Some theorists asserted, that March and Simons model has overly
influenced further studies about employee turnover and that their success may have constrained
other aspects (e.g. Lee and Mitchell, 1999).
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Turnov
erIntent
Figure4:SimplifiedVersionofMarchandSimonsModel
(Morrellet
al.,2001:p.62)
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2.4.2. Mobleys ModelThe employee turnover decision process by Mobley (1977) has shaped the course of turnover
studies for the past decade. He pioneered an extensive explanation for the psychological turnover
process. Mobleys model is based on several former preceding studies, for instance March and
Simons theory (1958) about ease and desirability of work concept and Porter and Steers model
(1973) of met-expectation and intent to leave. The model is heuristic rather than descriptive
(Mobley, 1977: p. 239).
A schematic representation of the turnover decision process is illustrated in Figure 5. The
termination decision process can be described as a sequence of cognitive stages starting with the
process of evaluating the existent job followed by the emotional state of satisfaction or
dissatisfaction. One consequence of dissatisfaction is to initiate thought of quitting. The next step
is the evaluation of the expected utility of search (e.g. desirability of possible alternatives travel
or lost work time) and of the cost of quitting (e.g. loss of vested benefits). If perceived possibility
of finding an alternative is available and if the costs are not that high, the next step would be
behavioral intention to search for alternatives followed by an actual search. If alternatives are
existent, then an evaluation of alternatives will proceed. Afterwards a comparison of the present
job to alternatives will follow. If the comparison favors the alternative, then behavioral intention
to quit will be stimulated, followed by the final decision to quit. (Mobley, 1977: p. 237-239)
Other later studies extended Mobleys model by including other variables, such as
organizational commitment (e.g. Kim et al., 1996) or examined factors that affect job satisfaction
more precisely (e.g., Price&Mueller, 1981).
Mobleys model features frail on empirical evidence for the conceptual differentiation among his
explanatory constructs (Hom&Griffeth, 1991: p. 350). Subsequent models enhanced Mobleys
construct. One of the established theoretical alternatives was Hom et al.s model in 1984
(Hom&Griffeth, 1991). They argued that Mobleys theory had a lack of empirical evidence for
the conceptual distinction among his explanatory constructs. However, their findings to some
extent showed a similar possible intermediate step in the turnover process, yet a major distinction
exists. Their study resulted that the Intention to Quit takes place before an Intention to
Search.
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Figure 5: Mobleys Employee Turnover Decision Process Model
(Mobley, 1977: p. 238)
2.4.3. Sheridan and Abelsons ModelOne established model is called the cusp-catastrophe model and has been developed by
Sheridan and Abelson (1983) to explain job turnover of nursing employees. Compared to the
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prior models it offers a more complex illustration of the turnover process (see Figure 6).
Sheridan and Abelson based their work on the mathematical Catastrophe theory, which considers
the dynamic withdrawal process that occurs over time and a discontinuous change from retention
to termination (Morrell et al., 2001: p. 43).
The model has three main characteristics. Firstly, the withdrawal behavior is a discontinuous
variable with abrupt changes, which is characterized with a delay rule. According to this, an
employee attempts to retain in employment as long as possible. If the employee feels that he
cannot stay any longer, due to job dissatisfaction or stress, then he will abruptly change from
retention to termination. Secondly, characteristic is the presence of the hysteresis zone of
behavior for some values of the control factors and is being described as the fold in the
behavioral surface. The trace of the fold can be seen on the control surface and is named as the
bifurcation plane. It represents a state of disequilibrium for employees, in which they are about
to change from retention to termination. Thirdly, the divergence of behavior occurs on opposite
sides of the bifurcation plane. As employees approach the bifurcation plane, very small changes
in the control variables, such as job tension or stress, can result in discontinuous changes from
retention to termination. (Sheridan&Abelson, 1983: p. 419-420)
One crucial limitation of this study assumes linear and continuous relationships between the
listed factors and turnover. It fails to reflect the threshold nature of the phenomenon (Morrell et
al., 2001: p. 44). However, Sheridan and Abelsons model offered two fundamental contributions
to the turnover research. First they recognized the discontinuous dynamic characteristic of
turnover and second because of its provocative divergence from traditional view of the turnover
process it indicates another direction for future research (Morrell et al., 2001: p. 44).
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Figure 6: Sheridan and Abelsons Cusp-Catastrophe Model
(Sheridan&Abelson, 1983, in Morell et al., 2001: p.63)
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2.4.4. Price and Muellers ModelPrice and Muellers model from 1986 analyzes the causal determinants of turnover (Morrell et
al., 2001). Determinants of voluntary turnover are based on empirical research conducted that
has been since 1972 at the University of Iowa. Compared to March and Simons framework this
model offers a comprehensive list of determinants, such as generic factors like job satisfaction.
Turnover is interpreted as the result of a decision process (Morrell et al., 2001: p. 38).
Exogenous variables, which are independent from the states of other variables in the model, are
subdivided into three major groups: Environmental (e.g. Opportunity and kinship
responsibilities), individual (e.g. General training) and structural (e.g. Routinization) groups
(Price, 2001: p. 601). Endogenous variables which values are determined by the states of other
variables in the model (www.personal.umd.umich.edu) are job satisfaction, organizational
commitment and intent to leave. Several unidirectional causal relationships with the dependent
variable turnover are illustrated in Figure 7.
In the meantime, Price and Mueller enhanced their model by adding other exogenous (e.g. social
support) and endogenous (e.g. search behavior) variables in their construct (Price, 2001).
Nevertheless, this model also shows some limitations. There is a lack of fundamental theory of
behavior or action, thus this limits an adequate explanation for the turnover process. The sample
featured a lack of occupational heterogeneity, since they conducted their tests mostly on middle
class jobs, such as nurses or teachers. They also failed to investigate interaction effects regarding
the determinants of turnover (Morrell et al., 2001: p. 38).
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Turnov
erIntent
Figure7:PriceandMuellersCausalModel
(Price&Mueller,1986inMorrellet
al.,2001:p.63)
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2.4.5. Lee and Mitchells ModelThe model by Lee and Mitchell established in 1994 describes different psychological paths that
employees take when leaving organizations. It resulted that many people quit their jobs not only
due to negative affects (e.g. job dissatisfaction), but because of the variety of particular jarring
events, identified as shocks (e.g. unsolicited job offer, changes in martial state or firm
mergers). The authors argued that most people follow one of four psychological and behavioral
paths when leaving. Major components (shocks, scripts, image violations, satisfaction and job
search) were used to categorize leavers into one of the four paths (Lee and Mitchell, 1994: p.
451).
Figure 8 depicts the unfolding models four theorized paths. Path 1 describes how a shock can
trigger the enactment of a script. This script details a plan of action and can be based on past
experience, observation of the experience of others or social expectations. The employee quits
without considering other job alternatives. Moreover, job satisfaction seems to be irrelevant in
the decision process in path 1. In path 2, a shock initiates an employee to reconsider his
attachment to the organization, since image violations are perceived by the employee. Image
violations occur when an individual's values, goals, and strategies for goal attainment do not fit
with those of the employing organization or those implied by the shock. The person leaves
without searching for other alternatives. In path 3, a shock generates an image violation.Consequently this induces a persons evaluation of the current job and several alternatives. In
path 4, the precipitator is job satisfaction. Some employees who experience job dissatisfaction
simply leave without having other alternatives (Path 4a), while other dissatisfied workers quit
only after searching and evaluating other jobs (Path 4b) (Lee&Mitchell, 1999: p. 451-452).
Path 4b represents the turnover process suggested by many theorists. The other paths suggest
processes that have not been discussed in the literature before. The unfolding model is a
contemporary example of an account which represents a break from the established paradigm
(Morell, 2001: p. 48). However, this model still features some unexplainable paths, which should
be examined in order to understand the turnover process as a whole.
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32
Turnov
erIntent
Figure8:LeeandMitchellsUnfoldingModel
(*)indicatesthattherouteisnotclassifiableandthatit
representsatheoryfalsificationawayinwhichanindividual
couldleavean
organizationthatwould
notbepartofoneofthemodel'spaths(LeeandMitchell,1999
:p.451)
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2.4.6. ConclusionAfter discussing five established models, there is an indication that none of the described models
offered an adequate explanation for the turnover process. It has to be emphasized that due to the
high complexity of the concept a general turnover process model still not exists. In spite of
extensive studies on turnover in organization, there is yet no universally acknowledged
framework for understanding why employees choose to leave (Lee and Mitchell, 1999).
Although there is no standard model for understanding voluntary turnover process as a whole, a
wide range of variables have been found useful when it comes to interpreting employee turnover.
Therefore understanding the reasons for turnover intent can be also explained by outlining the
impact of various factors, which are discussed in the following chapter.
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3. Factors that have an Impact on Turnover IntentVoluntary turnover is a complex process that includes several elements, which are illustrated in
Figure 9. It is classified in three major causes. Firstly, price and convenience of the withdrawal
plays an important role for employee turnover and separates social from financial aspects. The
financial aspect may take many forms, such as wage, fringe benefits and other commodities that
have financial value which organizations give to employees in return for their service. The social
aspect refers to the social behavior of an employee within his organization, such as integration or
relationship with other associates. Low perceived financial and social aspects in the own
organization can lead to turnover. Secondly, the intensity of desire for withdrawal has an impact
on turnover. Job satisfaction and job insecurity can be placed in this field. If an employee is
dissatisfied or insecure with his job, then intensity of desire for withdrawal will be higher.
(www.hrm.unizh.ch)
Figure 9: A General Illustration of Turnover
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Last but not least, the attractiveness and availability of alternatives can influence employee
turnovers. External factors, such as labor market or personal living circumstances, play decisive
roles in the turnover process. This paper would like to address the issue of the specific impact of
the determinants in the following chapter.
3.1. Determinants
The focus of this chapter would be to identify determinants causing turnover and to deduce
hypothetical direction of action. Several variables will be categorized into three different groups;
psychological, economic and demographical variables. This paper takes in account that some
determinants may be interest of multiple categories. However, the purpose of the classification of
the determinants into a category is to give a general view. According to Price (2001), economists
and psychologists, who were predominantly involved in the turnover research, focused their
interest on different variables. Psychological accounts emphasized the role of individual choice,
whereas economic views are focused on the formative role of external influences such as
external opportunities (Morrell et al., 2001). Nevertheless, this study adjusted the table with
further factors, due to their relevance in the turnover process. Potential determinants, which are
also captured in our data set HR Barometer 2007, are listed in Table 4.
Table 4: Determinants for Voluntary Turnover Subdivided into Categories
Psychological Determinants Economic Determinants Demographic Determinants
Psychological Contract Job Satisfaction Organizational
Commitment
Job Insecurity
Pay External Opportunity Training Company Size
Age Tenure
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3.1.1. Psychological determinants
Psychological determinants refer to the employees mental process and behavior, such as
expectations, orientation, job satisfaction, organizational commitment, job involvement or
affectivity. Conceptualizing turnover psychologically deals with factors that are influenced by
employees emotions, attitude or perception (Mueller&Price, 1990: p. 322). The psychological
school about turnover process concentrates more on the decision dimension to turnover. Some
perspectives of the economist appear in the psychological model, but are usually conceptualized
in other terms. For instance, while pay is one major dimension in the economic school,
psychologists stress individual variations in expectations about pay, such as distributed justice or
pay satisfaction.
In contrast to economic dimensions, psychological view enables the effective management of
turnover by offering potential on focusing their efforts on a key group of employees, or even on a
single employee (Morrell et al., 2001: p. 32). The psychological school of turnover may be
classed as voluntary, as they emphasize the role of individual choice, whereas economic
accounts are more typically determinist, as they emphasize the formative role of external
influences such as alternative opportunities(Morrell et al., 2001: p. 32). However, the
psychological school often includes only those dimensions related to work issues and thus they
neglect considering non-work factors as reasons for leavingwork (Lee et al., 1996). Psychologicaldeterminants are listed below.
Psychological Contract
A psychological contract refers to an individuals beliefs regarding the terms and conditions of
a reciprocal exchange agreement between that person and another party (Rousseau, 1989 in
Farmer&Fedor, 1999: p. 350). The concept of the psychological contract is based on the insight,
that the employees motivation and the level of their performance have to be maintained by the
organization through incentives and rewards (Brinkmann&Stapf, 2005: p. 21-22). This give and
take relation between organization and the employees is a complicated process about exchange
and adjustment, and is made up of manifold and reciprocal expectations. The psychological
contract contains all reciprocal yet unexpressed expectation, hopes and wishes of employees or
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employers and is a not formulated supplementary agreement next to the lawful binding work
contract. Some bipartisan matters concerning the psychological contract are listed in Table 5.
Each lopsided accomplishment leads to disequilibrium of the psychological contract.
Lopsidedness occurs when the company considers the employee only under the aspect of the
organizational purpose and solely fulfills the obligation on the formal contract, such as wage
payment. It signifies a negligence and contempt of individual motives of the employees and
leads to insufficient dedication. Employees then tend to level their interest only on their wages. If
the fulfillment of employees expectations, wishes and hopes fail to appear in the long run and
the disadvantages are not equilibrate by advantages, then the employees inner conflict will get
worse. If an employee is not able to bring about any changes, then work dissatisfaction will
occur and then he will feel the break of the psychological contract. (Brinkmann&Stapf, 2005: p.
23)
Table 5: Bipartisan Expectations
Employee Comfortable and satisfying working conditions Possibility on exerting an influence on organizational matters Proper care, encouragement and support by the employer Protection from being overstrained and not being challenged Establish job safety
Employer Classification and subordination of the employee under existingstructures
Unconditional loyalty Unrestricted workers availability
(Brinkmann&Stapf, 2005: p. 22-23)
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The foundation of the psychological contract is based on the social exchange theory, which
assumes that the human behavior is controlled by individual utility maximization
(Brinkmann&Stapf, 2005: p. 24). Humans strive to maximize benefits and minimize costs.
Contract violations can trigger negative responses, such as lower the employees contributions,
reduced satisfaction or turnover intentions (Farmer&Fedor, 1999: p. 352).
H1: If the employee perceives the psychological contract as broken, then turnover intent will be
higher.
Job Satisfaction
Job satisfaction is the pleasurable emotional state resulting from the appraisal of one's job as
achieving or facilitating the achievement of one's job values (Locke, 1969: p. 316). Job
satisfaction was conceived to be ones affective attachment to the job viewed either in its entirety
(global satisfaction) or with regard to particular aspects such as leadership. It is conceptualized
as an affective and emotional response. Satisfaction is defined as the degree to which employees
have a positive affective orientation towards employment by the organization (Price, 1977: p.
79). Negative affective orientation towards the organization will emerge when employees are
dissatisfied. The conformity, predictability and compatibility components of job satisfaction
rather refer to the psychological school (Morrell et al., 2001: p. 34). Many studies showed
empirical evidence that job satisfaction is an important predictor of future mobility (e.g. Mobley,
1977; Hom&Griffeth, 1991).
H2: Job satisfaction decreases turnover intent.
Job satisfaction is a complex construct composed of several facets which influence the
employees mind. The literature commonly distinguishes various dimensions of satisfaction. It
should be emphasized that this study views satisfaction not only as global emotional state, but
also as a product of different determinants which are sampled in the given data set HR-Barometer 2007.
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Autonomy
Autonomy is the quality or state of being self-governing. In this study the term autonomy is
used to refer to jobs rather than to organization and refers to the control over work activities.
Work autonomy is defined as the amount of discretion that an employee has in carrying out his
work activities (Price, 1997: p. 456). Interdependence and work autonomy are often confused in
studies. The degree to which a worker depends on group members in performing his job must be
differentiate from the amount of power that an employee has relative to his job (Price 1997: p.
455). This study hypothesizes:
H2a: Autonomy has a positive impact on job satisfaction.
Pay satisfaction
According to Lawler, pay satisfaction or dissatisfaction is a function of the discrepancy between
what one feels one should receive and how much pay one does receive (Lum et al., 1998: p.
307). Several studies included pay satisfaction as a component of a multi-dimensional measure
of job satisfaction (e.g. Frisina et al, 1988). Pay satisfaction causes include personal and job
inputs, monetary and nonmonetary outcomes, the comparison process, as well as pay policies
and administration. Models of pay satisfaction are based on the concept of Equity theory (Lum et
al., 1988: p. 307) which emphasizes that pay satisfaction is caused by sentiments regarding the
equity of a persons pay. These sentiments are influenced by the perceptual and comparative
processes of the income/outcome ratio compared with a referent source, such as an associate. If
the ratio is consistent with the other referent source, then pay satisfaction results. Inequitably
feeling exists when someones pay is perceived to be less than anothers. Consequences of pay
dissatisfaction contain several unwanted employee behaviors, such as turnover, absenteeism or
lowered job performance. Pay satisfaction was examined to be negatively correlated with
turnover intent, since it was positively correlated with job satisfaction (Lum et al, 1998: p. 308).
H2b: Pay satisfaction has a positive impact on job satisfaction.
Participation
Employees should be able to have an influence over the decisions within the company. If
decisions affect the staff, then employees are likely to view participation in order to obtain more
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favorable decision outcomes. Compared to unfavorable decision outcomes without employees
possibility to participate can create negative attitudes towards those, who were responsible for
the outcomes (Magner, 1996). Participation can also be related to power particularly to
centralization, which is the degree to which power is differently distributed within the
organization (Price, 1997: p. 449). Thus the more power is distributed, the higher is the
decentralization. One of the benefits of Participatory Management is that employees will be more
contented, since they feel needed and wanted (Marrow, 1967). Therefore participation in
organizational decision making or concerning an employees own work setting should have a
positive impact on job satisfaction.
H2c: Participation has positive impact on job satisfaction.
Work flexibility
Work flexibility negotiates with employee conditions involving adjustments in the timing, scope
and/or place of work (Goldenhar, 2003). Two major characteristics are often discussed in studies
(e.g. Hill et al., 2001). One is the so called Flextime, where employees have the possibility to
choose their starting and ending hours. The other is Flexplace, where workers are able to do
their work at a location by choice other than the regular workplace, such as the employees home
(Goldenhar, 2003: p.3). In Hill et al.s paper (2001: p. 49) they argued that individuals better
manage long work hours with unpredictable work loading, when they have the control over when
and where to work. Benefits of work flexibility can be also seen in the level of employees job
satisfaction.
H2d: Work flexibility enhances job satisfaction.
Job design
Job design is defined as the organization of tasks and the structuring of jobs in a way that
provides satisfaction for job holders and increases their effectiveness (www.gov.je). It
compromises the specification of a work system related to a job and includes activities of job
enrichment, job enlargement and job rotation. Several studies investigated job satisfaction as
worker response to job design (e.g. Anderson, 1984)
H2e: Job design increases job satisfaction.
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Supervisory Support
The relationship of supervisor support, also referred to as leadership, and job satisfaction is a
paramount concern of several studies. A leader has to provide support or show consideration for
employees concerning, otherwise a negative leader-employee interactions can result in lower
pleasure with work, reduced productivity and motivation or absenteeism (Ribelin, 2003). Studies
(e.g. Mobley et al., 1979) discussed the important role of the immediate supervisor in a turnover
process. Supervisory support lowers turnover intent through its positive impact on job
satisfaction (Price, 2001).
H2f: Supervisory support has a positive influence on job satisfaction.
Organizational Commitment
Mowday and Steers defined commitment as the relative strength of an individuals
identification with and involvement in a particular organization (1979, p. 226). It is
characterized by three factors:
a strong belief in and an acceptance of the organizations goals and values willingness to exert considerable effort on behalf of the organization and a strong desire to maintain membership in the organization
Commitment can be seen as the loyalty to a social unit, such as organization, the subsystem of an
organization or an occupation (Price, 1997: p. 335). Most research on commitment concentrates
on organizations rather than subsystems or occupation. Organizational commitment refers to the
employees psychological attachment to the organization. Meyer and Allen conceptualized
commitment in terms of three distinct psychological states which influence whether the
employees remain or leave the organization (Lee et al., 2001: p. 597):
affective commitment: emotional attachment to the organization continuance commitment: recognition of the cost associated with leaving the organization normative commitment: perceived obligation to remain with the organization
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Most of the studies argued that affective commitment emerged as the most consistent precursor
of turnover intent (e.g. Sommers 1995). Yet it should be noticed that an employee can be
simultaneously affectively, continuously and normatively committed to the organization. Some
traditional studies argued that organizational commitment develops from job satisfaction (e.g.
Price&Mueller, 1981) and concluded that commitment takes longer to develop and thus is more
stable than job satisfaction. However, recent studies (e.g. Currivan, 1999) showed that no
significant relationship between organizational commitment and job satisfaction exists.
H3: Organizational Commitment lowers the turnover intent.
Job Insecurity
Hesselink et al. defined job insecurity as a personal concern about the continuity of the job
(Hesselink et al., 1999: p. 275). Employees can feel insecure even though no reasons for it exist.
However, job insecurity is more known concerning the future-uncertainty about a future job
development and its possible discontinuity. Hesselink et al. (1999) argued that there are two
dimensions that can cause job insecurity: the perceived probability and the perceived severity.
They stated that the more likely it is that a person will lose his or her job and/or the more severe
the consequences of the loss are, the stronger his or her feelings of job insecurity will be
(Hesselink et al., 1999: p. 275). Job insecurity resulted to be related to decreased work effort,
resistance to change and intention to job mobility, hence adversely impact organizational
effectiveness (Greenhalgh & Rosenblatt, 1984). The positive correlation between job insecurity
and turnover intent is to be expected. Individuals who worried about continuity of employment
are likely to seek more secure jobs.
H4: Job Insecurity increases turnover intent.
3.1.2. Economic determinants
Economists view the employees decision, whether he wants to leave or stay, as a result of a
rational cost-benefit assessment (Mueller&Price, 1990: p. 321). When rewards to costs ratio of
staying with an organization are equal to the ratio at another place of employment, the employee
will decide not to leave the current organization. Economic view analyzes the turnover process
with more emphasis on the interplay between externally determined variables such as pay or
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opportunity (Morrell et al., 2001: p. 21). However, a criticism of the sole economic perspective
might be that it fails to capture the complexity of the process of turnover within an individual
firm (Morrell et al., 2001: p. 33). Simply economic analysis of turnover may also create
solutions that are inoperable. For instance, the firm may be not able to modify pay or influence
the labor market factors (Morell et al., 2001: p. 33). This study will discuss some important
economic variables, which are illustrated in the data set.
Pay
Pay is one major component for economists. The dominant proposition which is subject to the
economic model is that high pay in their present employment will reduce turnover. According to
Mueller and Price (1990: p. 321), pay is considered as a part of the sanctions system used by the
organization to motivate employees to be in compliance with its regulations and rules. The wage
payment plays an important role in their current as well as in possible future employment. The
lower the salary is in his existent organization, the more an employer will aim to change this
situation. Furthermore it is to assume, that better paid employees within the same hierarchy level
tend to stay in the organization (Henneberger&Sousa-Poza, 2007: p. 61).
However, there are well-established literatures concerning motivation (e.g. McGregor 1957)
suggesting that for at least some individuals, pay is not the sole motivating factor. It is told that
motivation has some link with job choice and that pay will not be the sole criterion used when
people decide to choose a job, or when they decide to continue within an existing job.
H5: High pay has no significant effect on turnover intent behavior.
External Opportunity
External Opportunity refers to the availability of alternative, attractiveness and attainability of
employment in the environment. The interaction of supply and demand forces in the economy
must be taken into consideration in measuring external opportunity. The availability is mainly
about the number of opportunities outside the organization. The attractiveness refers to the pay
levels of such opportunities. Last but not least, attainability is defined by the possession of the
skills required on the job (Mueller&Price, 1990: p. 321). Thus numerous higher paid jobs for
which a worker is qualified should produce a greater turnover.
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H6: High perceived external opportunity produce greater turnover intent.
Training
The training dimension is relevant for the turnover process and is related to pay and job market
components. Many employees increase their productivity by adding new skills to their
knowledge and perfecting old ones while on the job (Forrier&Sels, 2003: p. 151). Thus the
relationship between training and turnover intent can be traced back to the Human Capital
theory, arguing that the investment on training can increase the quality of an employee (Becker,
1993). This study did not consider distinguishing between the two different types of training,
such as general or specific training. However, the amount of training days can indicate the effort
of the company to invest in their employees with the intentions to retain them. Therefore this
study hypothesizes:
H7: High amount on training will reduce turnover intent.
Company Size
During the recession phase in the mid-nineties, smaller organizations were confronted with
higher turnover rate, whereas bigger organizations were able to keep their employees
(Henneberger&Sousa-Poza, 2002: p. 17). Many people assume that bigger companies pay a
higher salary, have more existing promotion opportunity (internal vertical and horizontal
mobility) and offer a higher job safety than smaller companies (Henneberger Sousa-Poza, 2002:
p. 17). Therefore an inverse relationship between company size and turnover intent exist
H8: Bigger companies feature lower turnover intent.
3.1.3. Demographic determinants
Demographic variables, also known as personal characteristics, are widely used in turnoverresearch. These variables are seen as social categories for an individual (Price, 1995). Two
determinants were examined to have a direct impact on turnover intent, such as tenure and age.
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Tenure
Many studies included tenure in demographical predictors of turnover (e.g. Cotton and Tuttle,
1986/ Price, 1977/ Hom&Griffeth, 1991). These studies discussed the relationship of turnover
and tenure. Tenure reflects specific human capital investments, learning about job characteristics
that can modify the positions attractiveness, as well as periodic labor force attachments
(Viscusi, 1980: p. 394). Individuals with a higher rate of length of service, who leave the
organization, are likely to be found disproportionately from among the members with low
lengths of service. Increased tenure shows to be strongly related to propensity to remain.
H9: If the amount of tenure is high, then turnover intent will be low.
Age
The factor age has been resulted to be negatively correlated with the probability of job turnover
intent (e.g. Henneberger&Souza-Poza, 2007). Based on the matching theory, younger people
have an experimental stage at the beginning of their professional life. A change is less attractive,
since the available time to redeem the costs associated with a job turnover diminishes with age.
H10: Turnover intent decreases with increasing age.
3.2. Moderators
After having listed various important determinants in the former chapter, it is now important to
propose the effects of moderators in the turnover process. According to Baron and Kenny, a
moderator is defined as a qualitative (e.g., sex, race, class) or quantitative (e.g. level of reward)
variable that affects the direction and/or strength of the relation between an independent or
predictor variable and a dependent or criterion variable (Baron&Kenny, 1986: p. 1174). The
two presented moderators, gender and education, are categorized as demographic variables (e.g.
Price, 1995). Studies revealed their effects as moderators in the turnover process (e.g. Royalty,
1998).
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3.2.1. Gender
Various studies examined the effect of gender on job mobility. The central question was if
women have a weaker attachment to their job and to the labor market than men. Since most of
the studies showed no apparent difference in job mobility by gender, searching for the main
effect of gender on turnover intent is senseless. A traditional view associated women with
childbearing or with secondary earners in the household (e.g. Royalty, 1998). These historical
views have had more reasons for leaving the job than men (e.g. follow a spouses career moves).
Therefore it can be assumed that the relationship between organizational commitment and
turnover intent is moderated by gender. Thus this study hypothesizes:
H11: Organizational commitment will have more impact on male turnover intent than on female
turnover intent.
It has been investigated that differences exist concerning job satisfaction and gender. One may
assume that women tend to be more satisfied than men (Souza-Poza, 2007: p. 896). Different
social-psychological studies (e.g. Crosby, 1982; Mueller&Wallance, 1996) show organizational
and job satisfaction to be equal between women and men. Economic studies however (e.g. Clark,
1997; Souza-Poza, 2007) concluded that due to the lower expectations of women about their
careers, they seem to have a higher job satisfaction on identical jobs than men, which generally
reduces job turnover inclination.
H12: The job satisfaction-turnover intent is stronger for female employees.
3.2.2. Education
Education is an important variable in Human Capital theory, which proclaimed that education is
an investment in human capital (Becker, 1993). It showed that productivity gains with education.
It is often assumed that the level of education has a positive effect on the probability of job
mobility since a high education is often associated with better labor-market alternatives (e.g.,
Royalty, 1998). However, most examinations did not reveal a significant direct impact on
turnover intent (e.g. Campbell, 1997).
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Based on the Matching theory, Henneberger and Sousa-Poza (2002: p. 28) argued that younger
employees tend to change their employment more often, since they are experiencing an
experimental phase at the beginning of their professional life. Since high educated employees
supposedly have better labor market alternatives (e.g. Royalty, 1998), this study hypothesize the
following.
H13: Younger high educated employees tend to have a higher turnover.
Royalty examined turnover by gender and educational level (1998). She found out that
differences in gender turnover are due to the behavior of less educated women. Less educated
women vary significantly in their turnover behavior from both groups of men and from more
highly educated women. Women with higher education do not significantly differ from less or
more educated men in their turnover behavior.
H14:Less educated women are more likely to have higher turnover intent then men.
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4. Methodology4.1. Procedure
For the evaluation of the listed impacts of determinants and moderators on turnover intent, an
empirical analysis is needed. The yearly survey HR-Barometer 2007 will provide the data set for
this study. At first, a small description about the data set will be given, followed by an overview
about the participants as well as their turnover intent in the su