da mylene perez (1)

8/12/2019 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

[email protected]

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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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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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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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

da mylene perez (1)

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