In the first half of the twentieth century, employment careers were often characterized by long periods of stable, uninterrupted employment at a single firm. However, contemporary career models are becoming more episodic in nature. Gone are expectations of career-long, stable employment. They have been replaced by expectations of substantial job mobility. Because workers are more accustomed to and accepting of job change, the task of designing programs that will convince workers to maintain current employment (i.e., effective retention programs) has become significantly more challenging.
Organizational attritions take various forms (e.g., quits, layoffs, retirements), but it has become customary in the domain of retention research to focus on voluntary quits. This focus is rooted in assumptions about the controllability of turnover behavior. Voluntary turnovers are controllable, it has been argued, because effective management intervention might potentially convince prospective quitters to stay. In contrast, involuntary turnovers (e.g., layoffs, firings) are more commonly viewed as irrevocable events—driven more by circumstance than personal volition.
Attempts to depict the turnover process have borrowed heavily from attitudinal and decision-theory frameworks. Typically, turnover models describe a series of cognitive and affective events that flow toward a decision to quit or stay. Decisions to quit (or stay) are products, in these models, of rational choice.
Attitudinal mechanisms have a central position in turnover theory. Affective tone (i.e., positive or negative) is thought to act as a routing mechanism— determining behavioral directionality. Positive affect predisposes an individual toward staying. In contrast, negative affective tone predisposes an individual toward quitting. Studies evaluating these ideas have usually supported them. For example, a substantial body of research on job affect (i.e., job satisfaction) convincingly shows that levels of job satisfaction and dissatisfaction reliably predict stay/leave decisions. Extending this position further, studies of organizational affect (i.e., organizational commitment) have also shown that attitudes toward the organization impact turnover in a similar fashion.
Organizational retention programs often attempt to capitalize on the knowledge of the affect-turnover linkage. For example, organizations have employed survey feedback as a component of their retention programs. Studies show that the administration of an employee attitude survey, followed by dissemination of the results to participants, results in attitude-score improvements. Attitude-score improvements should lead, in turn, to downstream improvements in employee retention rates.
A similar approach underlies the use of job redesign as a retention strategy. Job redesign involves reconfiguring a job so that the job will provide intrinsic rewards, like job satisfaction, to the worker. As workers experience more job satisfaction on their current job, they correspondingly become less interested in leaving the job for some alternative position.
Realistic job previews represent yet another retention strategy rooted in expectations about the value of positive affect. During processes of employee recruitment, realistic job previews challenge recruiters to present the hiring organization in an accurate light— even if that light shines on unflattering details about the firm. Presenting prospective employees with a realistic picture of their future employer helps to defuse the disappointment mechanisms that often follow misleading recruitment pitches. If disappointment and its attendant dissatisfaction can be avoided, the chances of longer term retention of new recruits become better.
Although important, job affect is not alone in accounting for individual turnover. Job search is another important mechanism shaping these decisions. Quit/stay decisions are substantially impacted by the visibility and accessibility of alternative sources of employment. In essence, contemporary turnover models assume that individuals will be most inclined toward quitting when an alternative job is perceived to be superior (e.g., more pay, more promotion opportunity) to the currently held position.
Retention program sponsors can make use of this insight by adjusting the relative attractiveness of jobs within the current organization. Adjusted enough, they may overtake external alternatives in terms of relative attractiveness. If the present job is deemed comparable to or better than an external job alternative, individuals may choose to forgo a job change altogether. Other things equal, employees will often favor the status quo over undergoing a major change in their life circumstances.
To improve job attractiveness, retention program sponsors may introduce periodic reviews of salary and benefit packages as a means of sustaining market competitiveness. However, job comparisons are not limited to compensation issues. Focusing on long-term career progress, workers may also evaluate the advancement and professional growth implications of a job move. Retention program sponsors can address these issues in a number of ways. They can eliminate dead-end jobs by restructuring promotion paths so that advancement opportunities are open to more individuals. They can create career ladders and implement “promotion from within” policies to send the message that employees will be given every opportunity for advancement with their current employer. They can also take steps to improve access to training and development opportunities for workers. Workers understand that skill and knowledge acquisition are the main currencies of career advancement, and they may reject a job change, even one offering more money, if the learning opportunities associated with the current job are seen as providing the best avenue toward long-range personal betterment and fulfillment.
Increased job mobility is making the task of retaining valued employees even more difficult in contemporary business environments. To increase the chances of program success, program developers must face the challenge of developing retention programs that respond to the unique needs and concerns of key employee populations.
See also:
- Organizational staffing
- Strategic human resource management
- Succession planning
References:
- Griffeth, R. W. and Hom, P. W. 2001. Retaining Valued Employees. Thousand Oaks, CA: Sage.
- Hom, P. W. and Griffeth, R. W. 1995. Employee Turnover. Cincinnati, OH: South-Western.
- Lee, T. W. and Mitchell, T. R. 1994. “An Alternative Approach: The Unfolding Model of Employee Turnover.” Academy of Management Review 19:51-89.
- Mitchell, T. R., Holtom, B. C. and Lee, T. W. 2001. “How to Keep Your Best Employees: Developing an Effective Retention Policy.” Academy of Management Executive 15(4):96-108.
- Steel, R. P. 2002. “Turnover Theory at the Empirical Interface: Problems of Fit and Function.” Academy of Management Review 27:346-360.
- Steel, R. P., Griffeth, R. W. and Hom, P. W. 2002. “Practical Retention Policy for the Practical Manager.” Academy of Management Executive 16(2):149-162.