Shocks as causes of turnover: What they are and how organizations can manage them

Abstract

Voluntary employee turnover is expensive. Companies that successfully retain the best and brightest employees save money and protect their intellectual capital. Traditional approaches to understanding turnover place accumulated job dissatisfaction as the primary antecedent to voluntary turnover. However, we show that precipitating events, or shocks, more often are the immediate cause of turnover. Using data from more than 1,200 “leavers,” we describe the nature, content, and role of shocks in turnover decisions. We then provide strategies to help organizations manage shocks, and thereby control turnover. © 2005 Wiley Periodicals, Inc.

Full text

Introduction
Contrary to conventional wisdom, accumu-
lated job dissatisfaction is not the immediate
cause of most voluntary turnover. Job dissat-
isfaction is a factor, but to focus on it as the
dominant cause of most turnover is incom-
plete and limited. Instead, we argue that
turnover often is triggered by a precipitating
event (e.g., a fight with the boss or an unex-
pected job offer) that we call a “shock” to the
system. We use this learning forum to discuss
and extend recent research on shock-induced
turnover and to offer recommendations for
using this new knowledge to improve
employee retention. Mounting evidence
demonstrates that the most powerful source
of long-term competitive advantage is human
and social capital (Becker, Huselid, & Ulrich,
2001; Pfeffer, 1995). Firms that attract,
develop, and retain top talent will thrive;
those that do not will face significant strug-
gles. All firms will be challenged to find the
right people and keep them. As noted by Fish-
man (1998), “The search for the best and the
brightest will become a constant, costly bat-
tle, a fight with no final victory. Not only will
companies have to devise more imaginative
hiring practices; they will also have to work
harder to keep their best people.”
The message for organizational leaders
is that they must develop clear strategies for
attracting and retaining good employees.
However, these plans must move beyond
methods to combat job dissatisfaction if
they expect to be effective. They also must
SHOCKS AS CAUSES OF TURNOVER: WHAT
THEY ARE AND HOW ORGANIZATIONS CAN
MANAGE THEM
Human Resource Management, Fall 2005, Vol. 44, No. 3, Pp. 337–352
© 2005 Wiley Periodicals, Inc. Published online in Wiley InterScience (www.interscience.wiley.com).
DOI: 10.1002/hrm.20074
Brooks C. Holtom, Terence R. Mitchell, Thomas W. Lee, and
Edward J. Inderrieden
Voluntary employee turnover is expensive. Companies that successfully retain the best and
brightest employees save money and protect their intellectual capital. Traditional approaches to
understanding turnover place accumulated job dissatisfaction as the primary antecedent to vol-
untary turnover. However, we show that precipitating events, or shocks, more often are the
immediate cause of turnover. Using data from more than 1,200 “leavers,” we describe the
nature, content, and role of shocks in turnover decisions. We then provide strategies to help
organizations manage shocks, and thereby control turnover. © 2005 Wiley Periodicals, Inc.
Correspondence to: Brooks C. Holtom, McDonough School of Business, Georgetown University, G-04 Old
North, Washington, DC 20057, (202) 687-3794, bch6@msb.edu

338 • HUMAN RESOURCE MANAGEMENT, Fall 2005
systematically address shocks and the criti-
cal role of these shocks in the voluntary
turnover process.
All Turnover Is Not Equal
Let us be clear—not all turnover is bad.
Researchers long have distinguished
between functional and dysfunctional
turnover (Maertz & Campion, 1998). How-
ever, conversations with practicing human
resource professionals indicate that most
organizations routinely track and report
turnover on an aggregate basis only. In a
recent interview, a senior vice president of
human resources told one of the authors that
the prior year’s turnover in the sales and mar-
keting department was 35%. The SVP then
asked, “What can be done to change this?”
This author’s reply, “Did you lose high per-
formers or low performers?”
The SVP has cause for alarm if the
answer to this question is “high performers.”
On the other hand, how should the SVP
respond to turnover if low performers are the
primary leavers? Perhaps the SVP should be
grateful. Too often, organizational leaders
are unable to answer to this basic question.
The bottom line—all turnover is not equal.
We also want to make explicit the point
that very few organizations can reduce their
turnover rate to zero (the issuance of a “Stop
Loss Order” in the U.S. military is a notable
exception, but even that may just delay
turnover). Organizations must distinguish
between avoidable and unavoidable turnover.
For example, why spend money and time try-
ing to retain people who leave for reasons out-
side the organization’s control? Such efforts
are highly unlikely to yield positive results. In
other cases, there may be much the organiza-
tion can do to retain a valued employee. In
sum, the optimal level of turnover within
organizations is not zero. Our aim is to help
human resource professionals better analyze
turnover so that they can proactively address
avoidable, dysfunctional turnover.
The Cost of Turnover
Recent research on the impact of voluntary
employee turnover in health care organiza-
tions highlights the significant price firms
pay for it—often without even knowing.
Waldman, Kelly, Arora, and Smith (2004)
suggest a conservative estimate of these costs
is between 3.4% and 5.8% of the overall
annual operating budget for an entire med-
ical center. This equates to a turnover cost of
$17–$29 million on a $500 million base. The
largest cost driver was the loss and necessary
replacement of nurses. The authors calcu-
lated that it would be revenue-neutral to
offer each departing nurse a staying bonus
equal to 86 percent of his/her annual salary.
In short, even a small increase in employee
retention can have a major positive financial
impact.
Health care organizations are not alone
in this struggle. Agilent Technologies calcu-
lates that the costs incurred when a software
engineer leaves are $250,000 (Joinson,
2000). The accounting firm KPMG recently
estimated costs at $100,000 for replacing a
departed employee (Emid, 2002). The prob-
lem is not isolated to high-skill industries.
The Food Marketing Institute estimates that
grocers in the U.S. experience $5.8 billion in
turnover costs annually—a number roughly
41% greater than the industry’s net profit of
$4.1 billion (Joinson, 2000).
In contrast, companies in Fortune’s 2002
“100 Best Organizations to Work For” report
much lower annual turnover rates (12.6% to
26%) than comparable companies in their
industry (Cascio, 2002). The same study fur-
ther reports that the top 100 firms have sig-
nificantly “higher average stock returns,
higher operating performance, higher return
on assets and higher returns on capital
employed.” Reduced turnover is a major
cause of these differences (Cascio, 2002).
Separate from the organizational
expenses, individuals incur significant costs
when they leave a job. If people go voluntar-
ily, at that moment they believe that leaving
their job is the right thing to do. However,
transitioning to another job or situation (e.g.,
stay-at-home parent or additional education)
can take a personal toll. A new job can be
stressful and may entail considerable uncer-
tainty and ambiguity. The employee and
his/her family members must make numer-
ous adjustments, especially if relocation is
The Food
Marketing
Institute
estimates that
grocers in the
U.S. experience
$5.8 billion in
turnover costs
annually—a
number roughly
41% greater
than the
industry’s net
profit of $4.1
billion.

Shocks as Causes of Turnover: What They Are and How Organizations Can Manage Them • 339
These data sug-
gest that a vast
amount of the
variance in
turnover is still
unexplained.
More impor-
tantly, this
research also
suggests that
concepts (or
tools) beyond
job dissatisfac-
tion are needed
to better man-
age the turnover
process.
involved. New living accommodations, new
schools for children, friends left behind, and
spousal re-employment are just some of the
possible hurdles. Some people estimate it
takes as long as a year for adjustments to be
made and a career to get back on track. The
evidence is very clear that the cost of
turnover is high for both individuals and
organizations (Glebbeek & Bax, 2004).
Therefore, organizations should reduce it—
paying special attention to avoidable, dys-
functional turnover.
Why People Leave
Over the past ten years, we have generated
theoretical explanations for why people leave
and have tested these explanations (Lee &
Mitchell, 1994; Lee, Mitchell, Holtom,
McDaniel, & Hill, 1999; Lee, Mitchell, Wise,
& Fireman, 1996). Published reviews of this
work are available (Mitchell, Holtom, & Lee,
2001; Mitchell & Lee, 2001). What we found
is surprising but critical to understanding the
turnover problem—precipitating events, or
shocks, cause voluntary departure more often
than accumulated job dissatisfaction. Shocks
not only are powerful antecedents (or drivers)
of voluntary turnover, but they also require
employee turnover to be managed in a very
different manner. We review briefly the ori-
gins of the voluntary turnover research and
present the “Unfolding Model.” We include
considerable detail about the types of shocks
that cause people to leave. We describe these
shocks in terms of abstract dimensions (e.g.,
positive versus negative events) and in terms
of their substantive content (e.g., how many
of them concern financial issues such as pay
or benefits). We then report data from more
than 1,200 leavers. The diversity of organiza-
tions and jobs represented in the collective
sample provides a broad perspective on
shocks and the frequency of their influence
on the turnover process.
The intellectual roots for most of the cur-
rent theory and research on voluntary
turnover grew from March and Simon’s
(1958) ideas about the perceived ease and
desirability of movement. Since then,
researchers typically operationalize perceived
ease of movement as the perceived number
and type of job alternatives. Perceived desir-
ability of movement has generally been meas-
ured as an individual’s level of job satisfac-
tion. A large body of empirical evidence does
demonstrate a modest relationship between
dissatisfaction and turnover. However, the
relationship between perceived alternatives
and turnover remains inconsistent.
For over four decades, theory and
research on turnover have focused on job-dis-
satisfaction-induced turnover, with the inten-
tion to leave as its immediate antecedent.
Meta-analyses indicate, for instance, that the
proportion of shared variance between levels
of satisfaction and turnover is 3.6% and the
proportion shared between intention to leave
and leaving is 12% (Griffeth, Hom, & Gaert-
ner, 2000; Hom & Griffeth, 1995). These data
suggest that a vast amount of the variance in
turnover is still unexplained. More impor-
tantly, this research also suggests that con-
cepts (or tools) beyond job dissatisfaction are
needed to better manage the turnover process.
Several years ago, we (Lee & Mitchell,
1994) argued that an alternative theory was
needed to explain how and why people leave
organizations. Based on interviews with peo-
ple who had left their jobs and a comprehen-
sive review of the turnover research, we pro-
posed the unfolding model of voluntary
turnover. Although individuals experience
unique circumstances when they leave
organizations, people appear to follow one of
four psychological and behavioral paths
when quitting. In published tests of the
unfolding model (Lee et al., 1996, 1999), we
demonstrated that these four paths did an
excellent job of describing up to 90% of the
people in these samples. For three of these
paths, a shock was the event that signaled
the initiation of the leaving process; as such,
shocks represent an important new tool for
understanding and managing turnover.
The Unfolding Model’s Major Components
and Paths
The major components of the unfolding
model include shocks, scripts, image viola-
tions, job satisfaction, and job search. First,
a shock is a particular, jarring event that ini-
tiates the psychological analyses involved in

340 • HUMAN RESOURCE MANAGEMENT, Fall 2005
quitting. A shock can be positive, neutral, or
negative; expected or unexpected; and inter-
nal or external to the person. Examples of
shocks include unsolicited job offers,
changes in marital status, transfers, or merg-
ers. Shocks and their surrounding circum-
stances are compared to an individual’s
images (i.e., values, goals, and plans for goal
attainment; see Beach, 1997), and if incom-
patible, thoughts of leaving occur. Second, a
script is a pre-existing plan of action—a plan
for leaving. Third, image violations occur
when an individual’s values, goals, and
strategies for goal attainment do not fit with
those of the organization or those reflected
in the shock. Fourth, lower levels of job sat-
isfaction occur when a person, over time,
comes to feel that his/her job no longer pro-
vides the intellectual, emotional, or finan-
cial benefits desired. Fifth, search includes
those activities involved with looking for
alternatives and the evaluation of those
alternatives.
Table I depicts the unfolding model’s
four theorized paths. In Path 1, a shock trig-
gers the enactment of a pre-existing action
plan or script. A person leaves without con-
sidering his current attachment to the organ-
ization and without considering alternatives.
Moreover, levels of job satisfaction are essen-
tially irrelevant in Path 1. Your spouse, for
example, gets a job in Washington, DC. You
have been hoping to move there, so you pick
up and go.
In Path 2, a shock (usually negative)
prompts a person to reconsider her attach-
ment to the organization due to image vio-
lations. After completing these relatively
brief deliberations, she leaves without a
search for alternatives. For instance, a per-
son gets passed over for promotion and,
after thinking about it, decides to quit. Note
that job satisfaction can be high before the
shock but fall directly after; the shock itself
has changed satisfaction levels. Also note
that in this path, people leave without
searching for alternatives.
In Path 3, a shock produces image viola-
tions that, in turn, initiate a comparison of
the current job with various alternatives.
Leaving typically includes search, offers, and
alternative evaluation. Suppose you receive
an unexpected job offer from one of For -
tune’s “100 Best Places to Work For.” After
thinking about it and comparing other
options, you decide to take the job. Note that
you still leave even though you may be satis-
fied with your current job.
With Path 4, lower levels of job satis-
faction are the precipitating state, instead
of a shock. The person realizes she is dis-
satisfied and leaves, with or without search-
ing for alternatives.
Shocks
Because shocks play a critical role in the
turnover process, it is important to explain
them in greater detail and to report what is
known about them from prior research.
From the outset, we must emphasize that
shocks are a conceptual addition to conven-
The Unfolding Model Paths
Path
Attribute 1 2 3 4A 4B
Initiating event Shock Shock Shock Job dissatisfaction Job dissatisfaction
Script/plan Yes No No No No
Image violation Irrelevant Yes Yes Yes Yes
Relative job dissatisfaction Irrelevant Irrelevant Yes Yes Yes
Alternative search No No Yes No Yes
Offer or likely offer No No Yes No Yes
Time Very short Short Long Medium Long
TABLE I

Shocks as Causes of Turnover: What They Are and How Organizations Can Manage Them • 341
A shock to the
system is
theorized to be a
distinguishable
event that jars
an employee
toward
deliberate
judgments about
his or her job
and may lead
the employee to
voluntarily quit.
tional ideas about dissatisfaction-induced
turnover. Shocks advance, rather than
replace, existing theory and empirical knowl-
edge of employee turnover.
A shock to the system is theorized to be
a distinguishable event that jars an employee
toward deliberate judgments about his/her
job and may lead the employee to voluntar-
ily quit. A shock is an event that generates
information or provides meaning about a
person’s job, and then is interpreted and
integrated into the person’s system of
beliefs and images. As such, it is sufficiently
jarring that it cannot be ignored. Note that
not all events are shocks. Unless an event
produces job-related deliberations that
involve the prospect of leaving the job
(defined in various ways in Paths 1, 2, and
3), it is not a shock.
Much like a disturbance in time-series
analysis, a shock to the system need not sur-
prise an employee; a shock can be any
expected or unexpected change to an ongo-
ing social system that shakes an employee
out of a steady state or challenges the status
quo with respect to his/her thinking about
the job. The jarring event holds a person’s
attention but does not necessarily create
negative emotions. Some shocks are entirely
neutral. Others may involve some positive,
neutral, and negative aspects; when com-
bined, however, it is still possible for their
composite to be neutral.
An employee’s interpretation of the
shock depends on the social and cognitive
context that surrounds the shock experience.
This context provides a frame of reference,
or decision frame, within which an employee
interprets the shock. The first interpretation
is shaped by the general context of the
employee’s knowledge of the organizational
culture (Schneider, 1990). The employee
then considers the shock along key dimen-
sions (e.g., novelty, favorability, threat, or
anticipation). A second process, one that is
more personal, is whether the shock can be
responded to easily and in an appropriate
manner. Of special interest is whether an
obvious response (script) comes to mind in
the form of past actions or rules the
employee has generated from observing oth-
ers or from knowledge he/she has acquired in
other ways. In the unfolding model, the
experienced shock to the system and the gen-
eral and personal decision frames prompt the
onset of a specific decision path.
Types of shocks. Categorizing types of
shocks is helpful for organizations trying to
mitigate their effects. Shocks either can be
personal events that are external to the job
or events that are job-related or organiza-
tional in nature. The first category might
include winning the lottery, having a spouse
transferred, being elected a church officer,
losing a loved one, or adopting an infant.
The second category includes events such
as being passed over for promotion, receiv-
ing a job offer/inquiry, having an argument
with the boss, becoming vested, or earning
a large bonus. This category also would
include corporate takeovers, scandals,
diversification, or downsizing. Note again
that the shocks described in both of these
categories may be positive, neutral, or neg-
ative and they may or may not be expected.
For example, shocks such as a company
takeover, being passed over for promotion,
or an unsolicited job offer often are unex-
pected. Expected shocks might be events
such as a planned birth of a child, a previ-
ously discussed merger, or a logical and
anticipated promotion.
We have found that different types of
shocks occur with varying frequency, and
that they differentially affect the specific
decision path followed by the employee
along with his/her eventual decision to stay
or to leave. We, therefore, believe that it is
critical to document the types of shocks that
people report and their substantive content.
See Table II for examples of shocks.
Study Findings
Overview of Shock Data Collection
There are two primary ways to obtain infor-
mation about shocks: (1) interview people
who are exiting organizations and (2) admin-
ister surveys to large numbers of people who
have left organizations previously.
Exit interviews are valuable sources of
information about organization-induced

342 • HUMAN RESOURCE MANAGEMENT, Fall 2005
shocks. They also provide insight into how
the organization might respond to future per-
sonal or organizational shocks. Though some
researchers have questioned the value of exit
interviews, the general consensus is that they
are useful tools for managers (Feldman &
Klaas, 1999; Steel, Griffeth, & Hom, 2002).
We conducted face-to-face or phone-based
exit interviews with 219 people in diverse
roles across four organizations.
Large-scale surveys administered to
employees inquiring about previous
turnover experiences allow researchers and
managers to identify industry-specific
shocks and to estimate base rates for the fre-
quency of diverse types of shocks. Large
data samples collected across organizations
minimize the effects of idiosyncratic organi-
zational or managerial issues. We accessed
two large databases containing information
about shocks. One is industry-specific,
while the other spans multiple industries.
Both samples contain educated, managerial-
level employees.
Although information from the exit
interviews or surveys can suffer from retro-
spective or social-desirability bias, empirical
evidence suggests that critical events such as
organizational departure create strong
images that are less likely to decay than other
memories (Symons & Johnson, 1997;
Wheeler, Stuss, & Tulving, 1997).
Research Settings
We gathered data from six separate sets of
data that measure and describe shocks. The
sample from each data set is described
briefly below, with additional details provided
in Appendix A.
Nursing. In Lee et al. (1996), 44 nurses who
left eight hospitals in a large metropolitan
area were interviewed.
Accounting. In Lee et al. (1999), 229
accountants who voluntarily quit Big 4
accounting firms were surveyed.
Shock Examples
Shock (direct quote): Was there an event that caused you to start
Shock Sample thinking about leaving?
Job offer GMAT “Received an offer for a better job”
Job offer-learning GMAT “Received a better offer with a company that offered opportunity
for advancement”
Job offer-money Accounting “Received an unsolicited job offer from a client for a large increase
in pay”
Fight (disagreement Accounting “Clash with a coworker over business ethics”
with boss, coworker)
Performance (encouraged to Accounting “I was passed over for promotion”
leave, passed over for promotion)
Merger (or reorganization, Local bank “My firm got bought out; didn’t like new company philosophy”
layoff of coworkers)
Spouse employment GMAT “Relocated because of spouse’s job”
Family issue International bank “Had a baby”
Significant illness International bank “My father became very ill; we moved to be near him”
School GMAT “I enrolled in law school”
Start own business GMAT “To start own consulting practice”
Other Corrections “I was scheduled for 3rd shift and assigned to a new department”
TABLE II

Shocks as Causes of Turnover: What They Are and How Organizations Can Manage Them • 343
Was it a “partic-
ular, jarring
event that initi-
ated the psycho-
logical analyses
involved in
quitting a job?”
If no, then no
shock is present.
International Bank. In Lee, Mitchell, Sablyn-
ski, Burton, and Holtom (2004), surveys
were distributed to 1,650 employees across
five separate organizational units of a large
international bank. We interviewed 105 of
the respondents who left during the year fol-
lowing the survey.
Local Bank. In another sample (unpub-
lished), we distributed surveys to nearly 500
employees of a community-based bank
located in the midwestern region of the
United States. We interviewed 49 of the
respondents who left during the year follow-
ing the survey.
Corrections. In an additional sample (unpub-
lished), a study was carried out with the
assistance and support of the Department of
Corrections of a southern U.S. state. We
drew a random sample of 1,035 individuals
who received the questionnaire. We inter-
viewed 21 of the respondents who left during
the year following the survey.
GMAT. In the final data set (Holtom &
Inderrieden, 2003), a large-scale survey sam-
ple is drawn from the Graduate Management
Admission Test (GMAT) Registrant Survey.
The survey was composed of four separate
waves of data. Approximately 250,000 indi-
viduals register to take the GMAT every year.
Based on a stratified random sample, ques-
tionnaires were sent to 7,006 individuals.
Completed questionnaires were received
from 5,790 individuals. Given our interest in
shocks and voluntary turnover, we analyzed
individuals working full-time when the Wave
III questionnaire was distributed (1994) and
who voluntarily left that employment by the
time of their Wave IV responses (1998).
Their responses to Wave IV provide the basis
for our analysis.
In the comments that follow, we refer to
these samples as the Nursing, Accounting,
Local Bank, International Bank, Correc-
tions, and GMAT studies.
Measures
Post-turnover interviews (available from Nurs-
ing, International Bank, Local Bank, and
Corrections). After collecting survey data
from more than 1,000 respondents at the
above-mentioned organizations, we received
the names and contact information for all
respondents who voluntary left the firms
within 12 months of the survey. We
attempted to contact all voluntary leavers
and ultimately conducted more than 200
interviews. The initial focus of the interview
was on what initiated their thoughts about
leaving (i.e., some particular event or job dis-
satisfaction). The interview protocol was
modeled after an industry-standard exit
interview. After the interviews were com-
pleted, four judges responded to the follow-
ing question to assess the characteristics of
the reasons/event(s) described in the inter-
views: Was it a “particular, jarring event that
initiated the psychological analyses involved
in quitting a job?” If no, then no shock is
present. If yes, the following questions were
asked to identify the characteristics of the
shock: (a) Was the event expected or unex-
pected? (b) Would you characterize the event
as positive, negative, or neither positive nor
negative? (c) Did the event that occurred
involve personal issues, company issues, or
was it a combination of the two? (d) Was an
unsolicited job offer or inquiry the event that
first led to thinking about leaving? The
judges initially agreed on 94.1% of the deci-
sions about shock characteristics. After brief
clarification and discussion, 100% agree-
ment was achieved among the four judges.
Post-turnover large-scale surveys (available
from Accounting and GMAT). In order to
assess shocks, we evaluated via survey the
reasons why individuals left their organiza-
tions. All 229 accountants recently left jobs in
Big 4 accounting firms. GMAT survey
respondents were asked (referring to the job
they held at the prior survey date), “Are you
still employed by the same organization?” If
the answer was “no,” respondents were asked,
“What is the main reason you left this job?
Please briefly describe the main reason you
left this job.” Using predefined decision rules,
four judges classified the reasons for leaving
from 906 respondents who changed jobs
from Wave III to Wave IV. First, judges
assessed whether or not the turnover was vol-

344 • HUMAN RESOURCE MANAGEMENT, Fall 2005
untary or involuntary. Eighty-seven of the
cases were deemed to be involuntary; because
we are interested in voluntary turnover, we
subsequently dropped all cases of involuntary
turnover from our analysis. The same inter-
rater methodology used in the exit interviews
to assess shocks was used to rate the events
reported on the surveys. The judges initially
agreed on 95.2% of the decisions. After clari-
fication and further discussion, 100% agree-
ment was achieved among the four judges.
These analyses provided us with infor-
mation on the distribution of paths, fre-
quency counts of shock attributes (i.e.,
expected/unexpected; positive/neutral/nega-
tive), and shock content (e.g., financial con-
cerns). It is important to note that although
some data from these organizations have
been presented in other published research,
the data and analyses presented in this arti-
cle are all new.
Results
As observed in Table III, 64% of all leavers in
the studies of individual organizations expe-
rienced shocks, while 58% of leavers in the
GMAT sample experienced shocks. More
specifically, the paths initiated by shocks
constitute a majority of the paths reported
for voluntary turnover. Further, Path 3 is
most frequently reported among those paths
initiated by a shock. This frequency occurs
in both the aggregate (83% of the shock-ini-
tiated paths as noted in Table IV) and for
each of the three samples (Accounting,
International Bank, and Nursing).
As can be observed in Table IV, Path 1
leavers experienced shocks that were prima-
rily personal (88%), positive (62%), and
expected (69%). In contrast, Path 2 leavers
experienced predominantly unexpected
shocks (89%). The majority of these shocks
were classified as organizational (58%) and
negative (58%). A large percentage of Path 3
leavers experienced unexpected shocks
(91%). The shocks were balanced in valence
(an even mix of positive, neutral, and nega-
tive) as well as across personal (53%) and
organizational (47%) issues.
Our overall analysis of shock content
indicates that only 14% of people mentioned
money as a reason for leaving in the GMAT
sample (Table V). In the aggregate across the
other samples, only 9% mentioned money as
the shock or a component of the shock.
As can be seen in Table V, nearly half of
the Path 3, leavers received outside job offers
(Accounting). While this finding may be
unique to the accounting profession, it
clearly is a frequently occurring shock in
other fields as well. For example, 280 of 475
(59%) shock-induced leavers in the GMAT
sample left because they received outside job
offers.
Chi-square tests looking across all avail-
able data reveal significant differences
among organizations and professions with
respect to types of organizational shocks (r2
= 38.51, df = 8, p< .00) and personal shocks
(r2= 38.80, df = 24, p< .03). However, there
were no statistically significant differences
across types of external shocks (r2= 7.16, df
= 8, p< .47), suggesting that diverse employ-
Shock Characteristics
Leavers Foreseen Nature Valence
No Shock Shock Expected Unexpected Personal Organizational Positive Neutral Negative
Nursing 18 26 9 17 17 9 12 3 11
Accounting 65 164 18 146 98 66 88 14 62
International Bank 40 29 5 24 9 20 7 0 22
Local Bank 22 27 12 15 6 21 4 3 20
Corrections 5 16 8 8 5 11 5 1 10
Total 150 262 52 210 135 127 116 21 125
Percent 36% 64% 20% 80% 52% 48% 44% 8% 48%
GMAT 344 475 381 94 157 318 359 39 77
Percent 42% 58% 80% 20% 33% 67% 76% 8% 16%
TABLE III

Shocks as Causes of Turnover: What They Are and How Organizations Can Manage Them • 345
ers experience similar types of external
shocks such as outside offers, opportunities
for further learning, and money issues.
One interesting result captured in Table
V is the proportion of leavers who cited
merger and acquisition activity as the shock
motivating their departure. Across the indi-
vidual studies, 13% of employees mentioned
merger or acquisition activity by their
employer as a shock prompting them to
reconsider their attachment. Nine percent of
people in the GMAT sample reported shocks
relating to mergers. Table V provides addi-
tional detail regarding the types of shocks
experienced and the relative frequency
across organizations.
Discussion
Conventional wisdom holds that job dissat-
isfaction is the main antecedent to
employee turnover; therefore, managers are
advised to monitor job satisfaction on a reg-
ular basis. While a necessary action, it is
unlikely to completely address turnover.
From this study, we learn that shocks pre-
cipitate a majority of the employees’ quit-
ting. This relatively new insight expands
the literature on employee turnover and
offers meaningful implications for manag-
ing and understanding employee retention.
Our study finds support for these implica-
tions across multiple samples and occupa-
tions using both survey and interview data.
Thus, it is critical also for organizations to
investigate, anticipate, and mitigate the
effects of shocks.
While shocks may precipitate leaving
more often than accumulated job dissatisfac-
tion, we wish to make it clear that these
results do not suggest that employers should
disregard job dissatisfaction as an antecedent
of employee turnover. Dissatisfaction-
induced leaving is an empirical fact (Grif-
feth, Hom, & Gaertner, 2000). Also, as noted
in Table I, while Path 3 is initiated by a
shock, it also includes relative dissatisfac-
tion. Further, monitoring job satisfaction
offers intrinsic and applied values beyond
managing employee retention. Our con-
tention is that shocks offer additional insights
for those managers concerned about employee
retention. Moreover, because managers are
so well trained and socialized to think about
dissatisfaction-induced turnover, it is essen-
tial that the role of shocks be given specific
emphasis in leadership training regarding
employee retention.
Shock Characteristics by Decision Paths
Foreseen Nature Valence Total
Expected Unexpected Personal Organizational Positive Neutral Negative Shocks
Path 1
Accounting 3351 5106
Int’l Banking 3131 3014
Nursing 5160 2226
TOTAL 11 5 14 2 10 3 3 16
Percent 69% 31% 88% 12% 62% 19% 19% 8%
Path 2
Accounting 1625 1157
Int’l Banking 0633 0066
Nursing 1533 6006
TOTAL217811 711119
Percent 11% 89% 42% 58% 37% 5% 58% 9%
Path 3
Accounting 11 125 78 58 71 12 53 136
Int’l Banking 2 17 3 16 4 0 15 19
Nursing 3 11 8 6 41914
TOTAL 16 153 89 80 79 13 77 169
Percent 9% 91% 53% 47% 47% 8% 45% 83%
TABLE IV

346 • HUMAN RESOURCE MANAGEMENT, Fall 2005
Shock Types
External Organizational Personal
Learning Fight with Perform- Merger Spouse
Oppor- Boss or ance or Acqui- Employ- Family Own
Job Offer tunities Money Coworker Issues sition ment Issues Illness Moved School Business Other TOTAL
Reason for leaving:
Accounting 75 10 15 10 19 29 3 10 16245164
International Bank 3007100142000229
Local Bank 905651002200227
Corrections 401420011020216
Total of individual studies 91 10 21 27 36 30 4 15 684411236
Percent 39% 4% 9% 11% 15% 13% 2% 6% 3% 3% 2% 2% 5%
GMAT 280 51 68 12 13 42 12 26 5 42 16 14 13 475
Percent 59% 11% 14% 3% 3% 9% 3% 5% 1% 9% 3% 3% 3%
TABLE V

Shocks as Causes of Turnover: What They Are and How Organizations Can Manage Them • 347
Specifically, it is critical for managers to
understand two unambiguous findings from
a large body of research. First, meta-analytic
studies summarizing the results of hundreds
of studies analyzing job satisfaction and job
performance demonstrate a modest, positive
linear relationship between them (Judge,
Thoresen, Bono, & Patton, 2001). In other
words, employees satisfied with their jobs are
more likely to perform well than employees
who are not. Second, meta-analytic studies
looking at job performance and turnover
report a modest, negative relationship
(Salamin & Hom, in press; Trevor, Gerhart,
& Boudreau, 1997, though these authors
present preliminary evidence that may move
our knowledge beyond simple negative linear
relationships). Put succinctly, these studies
indicate that better performers are more
likely to stay.
When combined, these key findings have
two important implications. First, people
who leave because they are less satisfied also
are likely to be lower performers in the
organization. Second, better performers who
leave are more likely to be job-satisfied.
Thus, if only satisfaction is monitored, it will
be difficult to anticipate the leaving of high
performers. Shocks may offer a more precise
tool to anticipate when these better perform-
ers might leave. In other words, dysfunc-
tional turnover is more likely to result from
shocks than from job dissatisfaction. Thus, it
is imperative that organizational leaders
rework their mental models to include the
concept of shocks.
Integrating Shocks into Organizational
Retention Plans
Organizations that seek to understand the
shocks their people experience can do as we
have done: conduct exit interviews and
administer broad-based surveys. Both
approaches have advantages and disadvan-
tages. In the case of exit interviews, informa-
tion is obtained “after the fact,” when typi-
cally it is too late for the organization to
intervene and keep the employee in the job.
However, collecting this information can
help the organization proactively address sys-
temic or recurring issues. Table VI outlines
ways shock information can be developed
and used to increase employee retention.
Broad-based surveys have the advantage
of providing insight into why current employ-
ees have considered leaving their organiza-
tion, and why they have left other organiza-
tions in the past. The information can
address organizational issues raised by
incumbents and thereby increase the proba-
bility of their staying. This information also
can be used in developing recruiting and
selection procedures to reduce the likelihood
of hiring people with a high probability of
leaving the organization. In short, organiza-
tions concerned about dysfunctional
turnover should conduct research to better
understand the types of shocks most likely to
prompt their employees to consider leaving.
Such information would also help man-
agers anticipate when employee expectations
might be violated (unexpected, job-based
Incorporating “Shocks” in Retention Plans
Stage Action Steps
Part 1: 1. Analyze exit interview data to assess the shocks that caused good people to leave your organization.
Gather Data 2. Conduct surveys of current employees to better understand:
A. Shocks they have experienced during employment with your organization and
B. Shocks that prompted them to leave prior organizations
Part 2: 3. On the basis of knowledge gained from Steps 1 and 2 above, develop plans to specifically address
Develop Plans shocks as they occur. Different types of shocks will require different interventions.
Part 3: 4. Train and encourage line managers to intervene with the appropriate plan as soon as possible after
Implement Plans learning that a good employee has experienced a shock.
5. Measure the success of the interventions and revise the plans as necessary.
6. Proactively envision possible future shocks (e.g., mergers, etc.).
TABLE VI

348 • HUMAN RESOURCE MANAGEMENT, Fall 2005
shocks). Such events might include perform-
ance appraisal, salary decisions, and promo-
tion activities. Managers should receive
training to help coach their people through-
out the year, as well as training on how to
deliver this type of information so as to
reduce the probability of their employees
experiencing shocks. Additionally, such
information should emphasize the impor-
tance of frequent communication between
organizational leaders and employees. If
communication lines are open, leaders can
foresee potential shocks and be among the
first to know when shocks do occur. This
knowledge will give leaders more time to
anticipate and respond to shocks.
From this study, we also learn that the
shock-induced Path 3 depicts the most com-
mon mode of employee turnover. Under-
standing based on decades of research sup-
ports the contention that organizations
should routinely monitor levels of employee
satisfaction. When satisfaction levels are
low, quitting is often anticipated; in
response, proactive managers attempt to
alleviate the sources of the dissatisfaction.
However, from our prior research, we know
that in Path 3, job satisfaction may be a less
important antecedent or determinant of
quitting than conventional wisdom suggests.
In Lee et al. (1996, 1999), we have docu-
mented that many job-satisfied people vol-
untarily quit. For some, they leave the cur-
rent satisfying job for a potentially more
satisfying one. For others, job dissatisfaction
is not even present until a shock leads the
person to consider other, possibly better,
jobs. If managers only monitor job satisfac-
tion, many Path 3 departures will be missed
and an opportunity lost for intervention. By
monitoring satisfaction and shocks, and by
intervening when necessary, employee
retention can be enhanced.
Knowledge about shocks and their attrib-
utes may provide guidance as to how quitting
unfolds over time, and how a manager may
best respond to enhance the likelihood of
retention. For instance, an expected, nonjob
shock (e.g., spouse’s transfer) may precipi-
tate Path 1 leaving. Offering changes to the
employee’s job tasks may be an ineffective
attempt to encourage retention. However,
efforts to place the employee within the firm
in a new location close to his/her spouse may
be highly rewarding (assuming the firm has
multiple locations).
Job-based, negative shocks frequently
prompted Path 2 quitting. Efforts aimed at
reducing turnover should focus directly on
that negative event. For example, if a valued
employee is not promoted when expected
(e.g., a promotion and hiring freeze is in
place), organizational leaders should antici-
pate an employee’s response and be prepared
to offer job enlargement, rotation, or other
challenges to keep the employee engaged.
From this study, we see that job-based
shocks—particularly unsolicited job offers—
frequently led to Path 3 quitting. Extending
counter-offers or professional development
opportunities or making the nonfinancial
attributes of the job more salient (e.g., focus-
ing on what the employee would give up by
leaving) may be effective responses. Since
financial shocks appear far less prevalent
than commonly thought, they may therefore,
be less potent, indicating that there is value
in highlighting a job’s desirable but nonfi-
nancial attributes.
Finally, shock attributes also appear to
vary by organization and profession. Thus,
appropriate responses will vary across contexts
and organizations. As examples of this varia-
tion, please consider the following scenarios.
Example 1. Suppose that Path 1 and 2 leav-
ing is common in one’s industry and com-
pany. Please recall that leaving in Path 1 and
2 occurs very quickly and that a manager’s
opportunity to react is quite limited. It may
be more efficient to focus on the effect of
shocks than on satisfaction (which is typically
unimportant in these two paths) and to mon-
itor for shocks that commonly occur within a
given industry, occupation, or profession. For
instance, shocks that prompt leaving for a
knowledge worker in a high-technology firm
may be quite different than that of a seasonal
snowboarding instructor working at a major
destination resort. More specifically, shock
attributes (e.g., expected versus unexpected,
personal versus organizational, monetary ver-
Shock attrib-
utes also appear
to vary by
organization
and profession.
Thus, appropri-
ate responses
will vary across
contexts and
organizations.

Shocks as Causes of Turnover: What They Are and How Organizations Can Manage Them • 349
Accumulating
evidence
indicates the
importance of
organizations
carefully
analyzing and
monitoring
shocks.
Possessing this
knowledge,
managers then
can make
evidence-based
decisions
regarding when
to focus on
shocks or
satisfaction, or
both.
sus nonmonetary) could be assessed via sur-
veys, exit interviews, and/or management by
wandering around. In turn, managers might
then devise ways to deal proactively with
these anticipated shock types. For instance,
job-based shocks might be addressed via real-
istic job previews; abhorrent event–based
shocks might be prevented by clear and
meaningful whistle-blowing policies; and the
effect of career-based shocks might be less-
ened with career counseling and training as
well as clear paths for career progression.
Example 2. Suppose that Path 3 leaving is
most common in one’s industry and firm (as
it is for nurses and accountants). For Path 3,
unsolicited-job-offer shocks cause compari-
son of the current job with the new job.
When the satisfaction perceived in the
offered job exceeds that of the current job,
turnover typically follows. Put differently, we
believe that relative job satisfaction mediates
the effects of shocks on leaving. Unlike Paths
1 and 2, Path 3 leaving unfolds much more
slowly. As such, a manager has a longer
opportunity to respond to the shock’s effect.
For some employees, and in some situations,
for instance, increased compensation may be
the main response to an unsolicited job offer.
A counter-offer, salary increase, or immedi-
ate promotion are some of the viable
responses. For many people, however, nonfi-
nancial reasons often prompt leaving.
Hence, additional training, new assignments
and responsibilities, or challenging tasks may
be factors that deflect leaving.
Limitations
This study presents a large body of data
accumulated over the past decade. Much of
the data was gathered using research proce-
dures carefully designed to assess shocks and
their consequences. However, not all of the
data sets were designed for this explicit pur-
pose. Notwithstanding the strengths of the
GMAT data set (e.g., a large sample with
respondents from many job types and indus-
tries), it was not specifically designed to
assess shocks. The “reasons for leaving” a job
were provided, but as researchers we had to
carefully code these reasons to assess the
presence or absence of shocks. A second lim-
itation is the time lag that exists between
when a person leaves his/her job and survey
completion. In this case, the lag may have
been up to two years. This time lag may
introduce the potential for recall bias that
arises with a retrospective design. Though
this potential exists, research suggests that
such retrospective designs are not necessar-
ily biased and remain a viable research strat-
egy (Miller, Cardinal, & Glick, 1997).
Conclusion
Over the course of the past decade, as we
have sought to better understand shocks and
their role in the turnover process, we have
been regularly reminded that organizational
life is complex and evolving. The concept of
shocks does not replace job satisfaction as a
predictor of voluntary turnover, but instead is
a complementary construct that allows
researchers to model more of the complexity
experienced by individuals who simultane-
ously manage careers and juggle numerous
nonwork issues. The workplace has changed
significantly in the 40 years since the early
investigation of job-satisfaction-based
turnover models. For example, the prolifera-
tion of dual-career and single-parent fami-
lies, the increased frequency of mergers and
acquisitions, and the decline of “jobs for life”
have resulted in employees looking at organi-
zational attachment from a different per-
spective. Changing jobs no longer is viewed
as an impediment to one’s career; in fact,
staying with a single employer now is viewed
as the exception. While job satisfaction
remains an important predictor of voluntary
turnover, it is imperative to recognize that
other factors are equally important.
All in all, shocks do matter. Our study
documents the diverse nature of shocks and
how different shocks affect voluntary
turnover. More importantly, it extends our
current knowledge for managing employee
retention. Accumulating evidence indicates
the importance of organizations carefully
analyzing and monitoring shocks. Possess-
ing this knowledge, managers then can

350 • HUMAN RESOURCE MANAGEMENT, Fall 2005
make evidence-based decisions regarding
when to focus on shocks or satisfaction, or
both. Finally, they will be armed to antici-
pate shocks and proactively defuse their
effects, thereby stemming the tide of dys-
functional turnover.
Acknowledgment
The authors would like to thank Dr. James
Burton, Dr. Chris Sablynski, Sarah Willems,
and Juliet Rackl for their valuable assistance
in gathering and analyzing the data.
Brooks C. Holtom is an assistant professor of management at the McDonough
School of Business at Georgetown University. He earned his PhD at the University of
Washington. His current research focuses on how organizations acquire, develop, and
retain human and social capital.
Terence R. Mitchell received his undergraduate degree from Duke in 1964, got an
advanced diploma in public administration from the University of Exeter in England
in 1965, and received a master’s degree and PhD in organizational psychology from
Illinois in 1969. He has been at the University of Washington since 1969. He was
appointed the Carlson Professor of Management in 1987. He has published numer-
ous journal articles and book chapters on the topics of motivation, leadership, and
decision making. He is a fellow of the Academy of Management and the American
Psychological Association and in 1999 he received the SIOP Distinguished Scientific
Contribution Award.
Thomas W. Lee (PhD, University of Oregon) is a professor of management, the Evert
McCabe Faculty Fellow, and the associate dean for academic and faculty affairs at the
University of Washington Business School. His primary research interests include job
embeddedness, voluntary employee turnover, and work motivation. In 2004, he was
elected to serve in the following capacities in the Academy of Management: Vice Pres-
ident and Program Chair-Elect in 2004–2005,Vice President and Program Chair in
2005–2006, President–Elect in 2006-2007, President in 2007–2008 and Past Presi-
dent in 2008–2009. In 2004, he was also elected a fellow of the Academy of Man-
agement.
Edward J. Inderrieden is an associate professor of management in the College of
Business Administration at Marquette University. He received his PhD in organiza-
tional behavior from the University of Colorado-Boulder. His research interests
include organizational justice and fairness, performance appraisal, organizational
attachment, and gender issues.
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352 • HUMAN RESOURCE MANAGEMENT, Fall 2005
Appendix A
Detailed Description of Research Settings
Nursing. In Lee et al. (1996), 44 nurses who
left eight hospitals in a large metropolitan
area were interviewed. The average age of
respondents was 37.57 years (SD = 11
years), and all but one nurse was female.
They had average job tenure of 45 months
(SD = 46 months).
Accounting. In Lee et al. (1999), 229
accountants who voluntarily quit Big 4
accounting firms were surveyed. The average
age of respondents was 39.93 years (SD =
7.19); 69% were male, and 44.1% had
advanced degrees (all others had at least a
bachelor’s degree).
International Bank. Lee et al., (2004), sur-
veys were distributed to 1,650 employees
across five separate organizational units of a
large international bank. Of the 1,650 sur-
veys, 829 (50%) usable surveys were
returned. Within our sample, 75.3% were
women, the overall average age was 34.2
years (SD = 9.9), and average tenure with
the organization was 6.6 years (SD = 5.1).
The majority of respondents had “some col-
lege” (48.3%) or a “BA/BS” degree (25.1%).
We interviewed 105 of the respondents who
left during the year following the survey.
Local Bank. In the fourth sample (unpub-
lished), surveys were distributed to all
employees of a community-based bank
located in the midwestern region of the
United States. Completed surveys were
returned by 364 of 478 employees—a 78%
response rate. Of the 58 voluntary leavers in
the year following survey administration, 49
were interviewed.
Corrections. In a fifth sample (unpublished),
a study was carried out with the assistance
and support of the Department of Correc-
tions of a southern U.S. state. At the time of
the study, the state correctional system con-
sisted of 12 facilities with a total staff of
3,028. We obtained a list of all current
employees, from which we drew a random
sample of 1,035 individuals (34%). These
employees received the questionnaire. A total
of 769 surveys were returned to the authors,
representing a response rate of 74%. We
interviewed 21 of the respondents who left
during the year following the survey.
GMAT. In an eighth data set (unpublished),
a large-scale survey sample is drawn from the
Graduate Management Admission Test Reg-
istrant Survey initiated in 1989. The survey
was composed of four separate waves of data
collection starting in 1990 and ending in
1998. Approximately 250,000 individuals
register to take the GMAT every year. Based
on a stratified random sample of approxi-
mately 250,000 test registrants, question-
naires were sent to 7,006 individuals who
signed up to take the test between June 1990
and March 1991. Completed questionnaires
were received from 5,790 individuals (82.6%
response rate). The current investigation
focused on Waves III and IV collected in
1994 and 1998, respectively. Given our
interest in shocks and voluntary turnover, we
looked at individuals who were working full-
time when the Wave III questionnaire was
distributed. While 4,533 individuals com-
pleted the Wave III questionnaire and
respondents for Wave IV numbered 3,769,
the final sample of 1,898 included only those
individuals who reported in Wave III they
were working full-time, and had attended a
graduate management school. Respondents
who were either fired or whose jobs were
eliminated were not included in the final
analyses. For the final sample, the average
age of survey respondents was 35 years; 58%
were men, 72.5% were married, and respon-
dents had worked in their current organiza-
tion for an average of 5.5 years at the time
the Wave III questionnaire was completed.