Employee turnover causes and organizational impacts

Job Satisfaction

Employee turnover can be a very expensive concern for an organization and can greatly lower productivity, competitive strength and the morale of remaining personnel. It is thus important that a company does all it can to support its employees and give them reasons for staying with the company. Studies show the correlation between increasing job satisfaction and lowering turnover, yet the parameters that make people satisfied with their jobs vary. It is key to get input directly from the employees on what they see as increasing job satisfaction.

Employee turnover has long concerned companies and researchers. Mobley and colleagues (1979) and Williams and Hazer (1986), for example, have argued that job satisfaction is a major precursor of worker turnover. Roznowski and Hulin (1992, p. 26) assert that on the whole the degree of job satisfaction is "the most informative data a manager or researcher can have for predicting employee behavior." High amounts of job dissatisfaction cause employee disinterest, especially related to turnover. This connection between job dissatisfaction and turnover has grown considerably over the past two decades, as competition and the speed of change continue to increase.

A number of employee turnover prediction models have been proposed to determine early findings of unexpected turnover, and therefore give company management enough time to respond. As noted by Lambert, Hogan & Barton (2001), "the effect of job satisfaction on turnover, however, is only part of the equation. It is equally important to explore, confirm, and understand the key antecedents of job satisfaction." By recognizing those factors that affect job satisfaction, managers will have the required input to meaningful decisions that target employee job satisfaction. Moreover, it is essential to look at both the causes and effects of job satisfaction.

These researchers (Lambert, Hogan & Barton, 2001) explain that there are two broad divisions of factors thought to impact employee job satisfaction: demographic and work environment characteristics. Age, gender, educational level, and tenure have been empirically demonstrated to be significant demographic indicators of job satisfaction (Williams & Hazer, 1986) and/or turnover, including intention to leave. The researchers chose role conflict, task variety, financial rewards, co-worker relations and autonomy/participation for work environment measurements. In this study (Lambert, Hogan & Barton, 2001) role conflict is defined as the level of an employee's conflicting duties, responsibilities, and directives and is measured by four indicators with an alpha coefficient of 0.632. Task Variety determines the degree to which a job is nonrepetitive, and is measured by five indicators and an alpha coefficient of 0.738. Financial Rewards details the employee's view of his or her economic rewards, such as pay, benefits and job security, and is measured by three items, with an alpha coefficient of 0.693.

Co-worker relations measures the respondents' relations with their co-workers, and is measured by five indicators and an alpha coefficient of 0.764. Finally, autonomy/participation is designed to determine the employee's awareness of how by much input he or she has been carrying out work-related tasks and is measured by five indicators with an alpha coefficient of 0.744.

Job satisfaction is usually delineated by the employee's affective response concerning his or her specific position and the comparison of actual outcomes to expectations, needs or wants. It has four indicators with an alpha coefficient of 0.795. Turnover intent is measured by the question, "Taking everything into consideration, how likely is it that you will make a genuine effort to find a new job (with another employer) within the next year? Very likely, Somewhat likely, or Not likely at all?" In turn, job satisfaction negatively effects turnover intent, and turnover intent directly impacts turnover.

The last measurement taken into consideration in the model proposed by Lambert, Hogan & Barton (2001) is the opportunity for other employment. They used a perception-based measure: If a person perceives there is considerable opportunity for other employment it should have a greater impact on turnover intent than just a general number such as the unemployment rate. Availability of alternative employment is measured by asking: "About how easy would it be for you to find a job (with another employer) with approximately the same income and fringe benefits you now have? Not very easy, Somewhat easy, or Very easy?" A national job sample of workers was used for the survey results.

The results of this study were supportive of the basic beliefs that the work environment is a critical element in determining worker job satisfaction, even after controlling for the effects of demographic characteristics, and that job satisfaction is a highly relevant forerunner of turnover intent. Job satisfaction is a key mediating variable between the work environment and turnover intent. The authors concluded that "Our results suggest that employers should focus on the work environment to improve worker job satisfaction, and ultimately lower turnover intent." Attracting top notch people is impossible, therefore, without an environment that cultivates job satisfaction. Employees are more concerned with working in an environment they enjoy over such financial elements as pay.

Similar results regarding work environment were found by Matheny (2008). With his research he found that although cash bonuses can improve physician executive job performance, they do not work well in improving job satisfaction. Rather, the executives wanted personal growth and development, life/work balance, effective communications, and personal relationships. What was of more interest: The vast majority of respondents assess job satisfaction on a regular basis. Forty-two percent assess it on a daily, weekly, or monthly basis and 35% on a quarterly, semi-annual, or annual basis. Determining how individuals and organizations view the importance of job satisfaction takes effort, but the survey respondents felt that these efforts could benefit organizations by increasing productivity, decreasing employee turnover, and improving organizational performance.