Turnover intentions - Essay Example

Retention and productivity levels of the existing workforce are an essential concern in human resource management. Employee turnover is one of the most studied aspects in organisational psychology (Mitra, Jenkins, & Gupta, 1992) and is of interest to other professionals, including personnel researchers, behavioural scientists, and management practitioners (Mobley, Griffeth, Hand, and Meglino, 1979). Employees may exit an organisation either voluntarily or involuntarily. For the purpose of this research, the criteria variable 'turnover intention' is defined as an individual's inclination to leave an organisation voluntarily (Dougherty, Bluedorn & Keon, 1985; Kiyak, Namazi & Kahana, 1997; Mobley, 1977; Stedham & Mitchell, 1996).

Employees leave for a variety of reasons, some leave to escape negative work environments, some to enhance their career goals and some to pursue more attractive opportunities (Roseman, 1981). Involuntary turnover is usually employer initiated, where the organisation believes the employee does not match its requirement. Involuntary turnover can also include death; mandatory retirements and ill health which can be a part of the voluntary separation In literature, turnover intention has been identified as the immediate precursor for turnover behaviour (Mobley, Horner & Hollingsworth, 1978; Tett & Meyer, 1993).

It has been recognised that the identification of variables associated with turnover intentions is considered an effective strategy in reducing actual turnover levels (Maertz & Campion, 1998). Consequences of Employee TurnoverAn employee's exit from an organisation is a direct cost, in the form of having to select, recruit, and train a new employee (Dalton, Todor, & Krackhardt 1982; Staw, 1980, Hall 1981). The exit also has indirect cost implications that include reduced morale, pressure on the remaining staff, costs of learning, and the loss of social capital (Des & Shaw, 2001).

This assumption was popular in the research literature in the late 20th century (e.g. Herman 1997; White, 1995). One of the main consequences for organisations that have a high turnover is the financial cost. The total costs of employee turnover are hard to measure, in particular, the effects on the organisations' culture, employee morale, and social capital or loss of organisational memory (Des & Shaw 2001). The focus has been on the tangible costs associated with turnover in the areas of selection, recruitment, induction and training of new staff, learning costs and the cost of being short-staffed (Cascio, 1987; Cheng & Brown 1998).

The cost of losing a high performer who has a high degree of responsibility, or an employee who is employed in an area where there is a labour market shortage, can be substantial. Dalton & Rador (1986) have estimated the cost of turnover to an organisation has been on average one to one and a half times the employee's salary. Indeed, Clark-Rayner and Harcourt (2001) estimate the costs of external recruitment of personnel at a New Zealand bank to be NZ$4,500 for non-management cadre employees and NZ$12,500 for management cadre employees.

In addition, turnover can have a negative impact on other employees by disrupting cohesiveness and increasing internal mobility, which can lead to triggering additional turnover (North, Rasmussen, Hughes, and Finlayson 2005). Turnover of employees may in itself triggers additional turnov