Understanding Employee Turnover The Need for a Contingency Approach

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Journal of
Manpower
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Understanding Employee
Turnover: The Need for a
Contingency Approach
Rachid M. Zeffane
University of Newcastle, New South Wales, Australia
Introduction
Contingency theory has been at the centre of much debate in the area of
organizational analysis and design[1-7]. Despite disagreement among these and
other researchers, there is strong evidence to suggest that the theory bears
extremely valuable potentials in explaining and predicting varying
organizational phenomena. These potentials are quite apparent in the more
recent research[6-8]. However, despite scattered attempts, the bulk of the
research featuring this theory has focused essentially on interactions between
macro-level organizational characteristics, to the detriment of the interface
between these and the individual level characteristics. By and large, studies
that have endorsed the contingency approach to organizational analysis
have concentrated on the organization structure-environment interface.
The integration of micro and macro levels of analysis is required for
contingency theory to be forthcoming. If these two levels can be integrated,
hypotheses about the effective and behavioural responses of individuals and
groups in organizations may be sharpened[9].
This article attempts to show that the theory remains extremely useful and
may be extended to individual level phenomena, such as the study of
turnover[10]. The seminal work of Argyris on the individual-organization
interface is probably one of the most inspiring pieces of work in this
endeavour[11]. Argyris argued that a great deal of organizational outcomes
depend on the degree of congruence (or consonance) between individual
(personal) characteristics and those of the organization. The rejoinder between
Argyris’ thesis and contingency theory is the basic notion of congruency and
fit. However, while the dominant interpretations of contingency theory stress
the notion of congruency and fit by reference to the organization structure and
the environment, Argyris’ view focuses on the individual-organization
interface. Nevertheless, both views strongly underline the potential impact of
fit/misfit on organizational effectiveness and performance (see [12]). One of the
main performance criteria is the ability of organizations to retain their
manpower and thereby minimize employee turnover. We endorse Argyris’ view
The project on which this article is based was funded by a research grant from the University of
Newcastle Research Management Committee (UN-RMC).
International Journal of Manpower,
Vol. 15 No.9/10, 1994, pp. 22-37,
© MCB University Press,
0143-7720
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on the necessary consonance between individual and organizational
characteristics for better performance. By the same token we also endorse its
concomitant (i.e. the fit/misfit) postulate which is also emphasized in
contingency theory. The aim is to show that future research on employee
turnover could benefit greatly by fully exploiting the usefulness of the above
postulate.
Employee Turnover Research
Employee turnover remains one of the most widely researched topics in
organizational analyses[13]. Despite significant research progress there still
remains a great deal of confusion as to what might actually cause employees to
leave/remain in their organizations. Also, the lack of convergence among the
models proposed in previous research has added to this confusion.
Fundamentally, these models were aimed at enlightening our understanding
and predictions of employee movements within/out of the organization.
However, the significant divergence among these models seems to militate
against uniformity and hence generalizations. Among those factors are the
external factors (the labour market) ; institutional factors (such as physical
working conditions, pay, job skill, supervision and so on) ; employee personal
characteristics (such as intelligence and aptitude, personal history, sex,
interests, age, length of service and so on) and employee’s reaction to his/her job
(including aspects such as job satisfaction, job involvement and job
expectations) (see Knowles[14] for a more complete description of these factors).
Some have speculated on the role of individual performance in effecting
turnover[13,15,16]. While individual performance might well trigger intentions
to quit, the argument cannot be sustained at the general level. Performance
occurs in given contexts and is generally tied to particular situations. It is not,
of course, always concomitant with general aptitudes. It may well increase the
confidence of individuals in seeking similar jobs (offering better advantages)
elsewhere. However, in general, individuals are aware of the circumstantial
characteristics leading to their improved performance and may not put it
(i.e. performance) at the forefront of the criteria determining their decision to
quit. For instance, high performers who have strong value-ties with their
immediate work-environment may not necessarily foresee a replication of their
current behaviour to be equally successful in another organizational setting.
Also, the potential effect of performance on turnover does not apply equally to
all individuals. Personal styles and perceptions of the work environment could
play an important role in shaping the above linkage between performance and
turnover (see for example Jamal and Vishwanath[17]). But performance as such
is not necessarily a predictor of turnover. Contrary to previous research
evidence, Dreher[15] exposes data which purports that it is not always the good
performers who tend to leave the organization. Should this pattern persist, then
one would argue that the turnover-related costs would be minimized over time
since it is only the lower-level performers who tend to leave. Dreher[15] only
compares levels of performance (on a series of aptitude tests) between leavers
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and stayers. He does not test for relationships between these tests. Furthermore,
some of the aspects measured by the aptitude tests used are not strictly
performance criteria. The variable named “initial potential”, for instance, has
more to do with aspects of personal aptitude than aptitude on the job.
Studies that have incorporated personality as a potential cause of turnover
have generally assumed direct causal linkages between these variables[17,18].
These studies have undermined the potential relevance of wider organizational
characteristics (such as organization structure and management style) which
might affect turnover. When these characteristics have been considered, they
have generally been aligned to other independent variables in order to test their
relative precedence in predicting turnover. Guest’s early comparative study of
assembly and non-assembly workers’ reaction to their jobs suggests that the
greater job-repetitiveness led to increased turnover[19]. While providing
significant evidence on the above impact, Guest’s study seems to have ignored
the potential moderating effects that personality variables may have on such
impact.
Few studies on turnover have considered macro-level variables such as
organization structure and management style as potential predictors[13,20].
Porter and Steers[20] have advocated the need to consider both individual and
organizational factors in making predictions about employee attitudes and
related behaviour. Other researchers have also echoed the need to consider both
individual and organizational characteristics in studying attitudes[21] and
performance[11]. Typically, the type of studies conducted to date have not
shown any great concern for the potential impact of these interactions. While
these studies apply to a range of behavioural and attitudinal aspects, this
lacuna is most apparent in studies on organizational commitment. Similarly,
Herman and Hulin[21] observed that studies investigating the simultaneous
influence of organizational variables and individual characteristics on
members’ attitudes and behaviour have simply not been done. Herman and
Hulin[21] also note that a review of the literature indicates the strategy (to study
interactions between organizational and individual characteristics and their
effects on attitudes) has not been translated into the methodology necessary for
empirical research. They remark that studies investigating the simultaneous
influence of organizational variables and individual characteristics on
members’ attitude and behaviour have simply not been done.
The Relevance of Organization Structure/Culture and Management
Style
There is some evidence showing that characteristics of organizational structure
consistently accounted for a large percentage of the variance in employee
responses to their relevant work environment[21,22]. In fact, the structural
effect was found to be a lot more prevalent than the basic demographic
characteristics[22]. As they put it:
The significant relationship which was unique to organizational structure and psychological
responses suggests that differential organizational experiences are distributed across the
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organization in a pattern commensurate with the organization structure. Employees in
structurally defined sections of the organization concurred in their evaluations of aspects of
the work environment[22, p. 227].
In fact the more recent studies[23] have tended to emphasize that the
demographic variables effect is only felt by way of interactions with
organizational characteristics such as structure and supervision. Bluedorn
posited that structure precedes job satisfaction in affecting the likelihood of
turnover among military personnel[24]. He explained this effect in terms of the
amount of control (implying centralization of power) that the organization
withholds and the desire for power and control that the individual might like to
exercise. Drawing on the early work of Tannenbaum[25], Bluedorn affirms that
most people desire power and will become dissatisfied when they cannot
exercise control. Although we agree with the potential linkage between
structure, personal aspirations and turnover, we do not subscribe (fully) to
Bluedorn’s view and model. This is because it puts aside a large proportion of
individuals who might feel comfortable to work in organizations where very
little power is devoted to them. Clearly, some individuals are more submissive
than others. In other words, some individuals are more tolerant of “power
distance” than others. Individuals with high tolerance for power distance would
not encounter dissonance between their aspirations (on that dimension) and
those of an organization with a high concentration of power. It is, hence, not
surprising that Bluedorn[24] found that organizational control accounted for a
mere 16 per cent of the variance in job satisfaction.
Commenting on the potential relevance of organization culture to
contingency theory, Tosi and Slocum[9, p. 21] suggested that the choice of
organization design will reinforce certain values and behaviours more strongly
than others. In their view, for example, because more specialists with similar
training and experience are likely to work together in a functional organization
than in the product form, one would expect to find higher levels of “professional
commitment” in a functional organization. Indeed corporate culture and
individual values are self-reinforcing. The degree of reinforcement will, of
course, depend on the amount of consonance between culture and individual
values.
The Individual-Organization Interface
Many recent studies on job attitudes have emphasized the need to consider the
potential effects of covariations between characteristics of organizations and
characteristics of people[13,22]. Previous research on worker attitudes has
tended to concentrate either on the individual characteristics of the worker,
job/task characteristics or on the broader organizational context within which
such attitudes might be manifested. Virtually few attempts have been made to
examine the way in which individual and organizational characteristics might
interact to determine employee attitudes and behaviour.
Some argue that the broader structural context has a stronger bearing on
workers’ attitudes than the individual characteristics of workers[21,23,26].
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Although the crucial nature of successful integration of individual and
organization has been stressed by early theorists[11] very few attempts have
been made to investigate this integration. This is more so in the case of studies
of turnover, absenteeism and commitment. Tosi and Slocum[9, p. 20], for
instance, posed the pertinent question of whether there is any systematic
relationship between a class of individual difference variables and type of
organization. They admitted that this question has not been adequately
addressed, although some literature has been devoted to the impact of
managers’ personality on the design of organizations[17,27,28].
Some have argued that the extent to which people identify themselves with
their organization has a positive impact on their level of satisfaction and
thereby their organizational involvement[29]. The consonance between
employee values and organizational values might provide the employees with a
certain degree of comfort through minimized stress. The degree of
consonance/dissonance between individual values/styles and those of the
relevant organization is concomitant with the degree of identification
experienced and the degree of compatibility between employees’ work ethic and
the values for which the company stands.
According to Flowers and Hughes[30, p. 50] “The employee’s ethic derives
from his/her own values and the actual conditions he/she encounters on the job.
The company’s values derive from societal norms, formal decisions by the
board of directors, and the policies and procedures of the managing group.” In
other words, employees tend to remain with a company until some force causes
them to leave. The concept here is very like the concept of inertia in the physical
sciences: a body will remain as it is until acted on by a force.
A widening gap (greater dissonance) between individual and organization
values will strengthen inertia (to leave); a narrowing gap will weaken it. In a
similar vein, Hrebiniak and Alutto[31] argue that role tension and uncertainty
result in the increased attractiveness of extraorganizational alternatives and
consequently decreased commitment to the work organization. In some ways,
this view overlooks what might cause “role tension” in the first place. Such
tension might well be in itself the result of misfits between personal and
organizational values and expectations (see [32]). Further, this tension might
depend on how tolerant the individual is of uncertain situations. This amount of
tolerance for uncertainty is embedded in the personal values and styles of each
individual. In fact, for those individuals with great tolerance for uncertainty, the
greater the organizational uncertainty, the greater the consonance between
their values and those of their organization and, consequently, the greater the
likelihood of their commitment to that same organization.
More recently, O’Reilly et al.[23] investigated person-culture fit (PCF) by
developing the organizational culture profile (OCP) instrument and using OCP
to assess PCF and test for the relationship between fit and work-related
outcomes. The relationship between preferences for organizational values and
individual personality variables was explored. As a result, 224 graduate
students, 395 accountants, and 730 middle-level government employees tested
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the hypothesis that person-organization fit (POF) is related to work outcomes.
Variables measured included POF, organizational commitment, job satisfaction,
intent to leave, and turnover. POF predicted job satisfaction and organizational
commitment a year after fit was measured and actual turnover after two years.
This evidence attests to the importance of understanding the fit between
individuals’ preferences and organizational cultures (see [12]). The purported
advantage of a strong corporate culture presumes that positive outcomes result
when people’s values are congruent with those of others and with those of the
organization. Meglino and his colleagues tested for the validity of this
congruency, in particular. The tests were carried out by using a design that
controlled for artefacts. The participants, 191 production workers, their
supervisors (n = 17), and 13 managers at a large industrial products plant,
completed questionnaires containing measures of job satisfaction,
organizational commitment and work values. Responses were later matched
with the attendance and performance records of the production workers in the
sample. Results showed that workers were more satisfied and committed when
their values were congruent with the values of their supervisor. Value
congruence between workers and their supervisors was not significantly
correlated with workers’ tenure; however, its effect on organizational
commitment was more pronounced for longer-tenured employees. In further
support to the above studies, Boxx et al.[33] examined the impact of
organizational values in the public sector and found that these strongly affected
satisfaction, commitment, and cohesion. They also found that value congruence
also affected these behavioural variables. Their study indicated that five values
should exist within their work environment: a belief in being the best, a belief in
the importance of the details of execution, a belief in the importance of people
as individuals, a belief in superior quality and service, and a belief in
the importance of informality to enhance communication.
Organization Commitment and Involvement
The concept of organizational commitment refers to the nature of the
relationship of the organization member to the system as a whole[34]. This
concept has also been defined as the relative strength of an individual’s
identification with and involvement in a particular organization[35]. Previous
studies have tended to treat commitment as an attitudinal as well as
behavioural phenomenon[36,37]. As an attitude, organization commitment
expresses a state in which an individual identifies with a particular
organization and its goals and wishes to maintain membership in order to
facilitate these goals[36]. As a behaviour, organization commitment has been
conceived as a state where individuals forgo alternative courses of action and
choose to link themselves to the organization[37]. In most circumstances,
it would be difficult to see how the concept could be treated as both an attitude
and a behaviour. In our view, organization commitment might be considered
primarily as an attitude. What is really behavioural is the amount of
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organizational involvement which results from this attitude. The conceptual
separation between commitment and involvement is important, for it helps
differentiate (and hence understand) intentions and actions. Attitudes spell
intentions while behaviours reflect actions. This distinction between
commitment (as an attitude) is apparent in the specific definitional
characteristics offered by previous research[35,38]. In that research
organization commitment is seen as being characterized by at least three
factors:
(1) a strong belief in and acceptance of the organization’s goals and values;
(2) a willingness to exert considerable effort on behalf of the organization;
and
(3) a strong desire to maintain membership in the organization.
Clearly, all of these factors reflect attitudes rather than behaviours. These
characteristics are not clearly dissociable, since one characteristic might derive
from the other[39]. Therefore, the amount of employ...