Optimal and dysfunctional turnover: toward an organizational level model.

Area of Science:

• Organizational Behavior
• Human Resource Management
• Labor Economics

Background:

• High employee turnover incurs significant costs, impacting organizational stability and productivity.
• Defining 'dysfunctional turnover' is crucial for effective human resource management strategies.
• Existing models often fail to capture the dynamic and variable nature of optimal turnover levels.

Purpose of the Study:

• To define dysfunctional turnover as a divergence from an optimal balance of turnover and retention costs.
• To propose a model where the optimal turnover level is greater than zero and organization-specific.
• To identify key attributes influencing employee quit propensities and organizational turnover rates.

Main Methods:

• Conceptual model development based on organizational and economic theories.
• Analysis of factors influencing employee retention costs and quit propensities.
• Positing a framework linking individual, organizational, and environmental attributes to turnover.

Main Results:

• Dysfunctional turnover is identified as a deviation from an optimal balance between turnover and retention costs.
• The optimal aggregate turnover level is proposed to be greater than zero and variable across organizations.
• Individual, organizational, and environmental factors are posited as key drivers of employee quit propensities.

Conclusions:

• Organizations should aim for a turnover level greater than zero to avoid dysfunctional levels.
• Optimal turnover is contingent on specific organizational contexts and employee retention dynamics.
• Understanding the interplay of individual, organizational, and environmental factors is essential for managing turnover effectively.