Content uploaded by K. Michele Kacmar
Author content
All content in this area was uploaded by K. Michele Kacmar on Nov 09, 2016
Content may be subject to copyright.
Sure Everyone Can Be Replaced … But at What Cost? Turnover as a Predictor of Unit-Level Performance
Abstract
Most turnover research positions employee turnover as the dependent variable and focuses on identifying its antecedents. In this study, we viewed turnover as a key predictor in determining unit-level performance. Specifically, a structural model was developed and tested that links managerial and employee turnover with performance through efficiency. We tested the model using a sample of 262 BURGER KING® restaurants. Results demonstrate that efficiency, measured as customer "wait time," mediates the relationships of both management and crew turnover to both sales and profit, and efficiency, measured as food waste, does not mediate the relationship of turnover to sales or profit.
... The average turnover rate of frontline employees in the retail industry is one and a half times higher than the rate observed in other industries. 1 Such high turnover is liable to lead inexperienced frontline employees to make more knowledge-based mistakes (Kacmar et al., 2006), which are a major cause of service failure. ...
... However, employee turnover is very high in the retail sector (Han et al., 2019;Rutherford et al., 2011), leading to immediate efficiency disruptions for customers (e.g., increase in wait time; Michele Kacmar et al., 2006). The loss of firm-specific human capital (Han et al., 2019) is liable to hamper effective customer service (Sunder et al., 2017). ...
... Following the onboarding process, newcomers will gradually acquire the attitudinal and technical frontline employee skills needed to perform well (Wang et al., 2012), ultimately leading to effective performance. However, although employees are learning the organization's policies, procedures, and methods, their lack of experience is likely to lead to mistakes being made (Michele Kacmar et al., 2006), potentially resulting in negative outcomes for the customer. Given that service failures attributable to sales staff member errors are inevitable and occur on a regular basis (Lindsey-Hall et al., 2023;Van Vaerenbergh & Orsingher, 2016), frontline employee inexperience increases the risk of such failures (Weun et al., 2004). ...
The extant literature on service failure focuses mainly on how to recover from such incidents. However, companies can act before a service failure occurs to mitigate its negative effects. Building on signaling theory, we adopt a mixed‐method approach based on five studies using different types of analyses (textual and content analysis, and multivariate analysis) to investigate the effect of signaling frontline employee inexperience on customer responses to service failure due to an error committed by an employee. Five studies provide evidence that highlighting inexperience—either informally (through a conversation) or formally (through an in‐training badge)—can act as a signal that prompts customers to be more forgiving toward frontline employees, and such consumer forgiveness then serves as an underlying mechanism to explain repatronage intention. This research also tests and explores the boundary conditions for the effectiveness of the inexperience signal. Our findings have various implications for professionals showing how useful it can be to signal the inexperience of a frontline employee who makes an error that leads to a service failure to be given a second chance, and how certain precautions should be taken to avoid the pitfalls of such a signaling strategy.
... It is through such relationships that tacit knowledge is transferred (Hansen, 1999;Uzzi & Lancaster, 2003). In case of workers' departures, the interpersonal relationships are destroyed, and the transfer of tacit knowledge is interrupted (Huckman & Pisano, 2006;Kacmar et al., 2006). ...
Aim/purpose – This study examines the relationship between staff turnover and perfor- mance in the microfinance industry in a dynamic perspective and investigates some contingency factors that moderate this relationship. Design/methodology/approach – We ran random-effects and GMM models based on a database of 2,814 branch-month observations from a specific microfinance organization. Findings – It takes three months to see a significant negative impact of turnover on the volume of a branch’s loan portfolio. Moreover, it takes four months after the turnover event for this negative impact to be counterbalanced. After four months, turnover stops having negative consequences and even becomes advantageous in terms of loan portfolio growth, but this positive effect lasts only one month. The effect of turnover thus appears to be particularly limited in time. Finally, we find that the negative relationship between turnover rate and performance is weakened by the seniority level of departing loan offic- ers and by the recruitment rate. Originality/value/contribution – First, this paper examines the duration of the conse- quences of turnover event, which is poorly studied in the literature. Second, it focuses on microfinance, an industry where relational capital is of high importance. Third, it ex- tends the theory on turnover by highlighting that the seniority level of departing employ- ees is a moderator in the relationship between turnover and organizational performance. Keywords: staff turnover, performance, context-emergent theory, microfinance, GMM. JEL Classification: J63, G21
... Ultimately this leaves employees being tempted and motivated to look for new and better job opportunities. The turnover issue has been brought to the attention of various academicians and practitioners due to it being costly and destructive to the organisations (Kacmar et al., 2006). ...
This study examines the effect of career growth dimensions (career goal progress, professional ability development, promotion speed, and remuneration growth) on turnover intention in the Sarawak construction industry. Using a quantitative method and cross-sectional design, data was collected through an online survey questionnaire and analysed using multiple regression analysis. Results indicate that career goal progress and professional ability development have a significant effect on turnover intention, while promotion speed and remuneration growth do not have any significant effect on turnover intention. These findings emphasise the importance of career growth opportunities and professional development strategies to enhance employee satisfaction and reduce turnover. Organisations should reassess retention strategies and consider other factors influencing turnover intention to improve employee retention efforts.
... Turnover has received significant attention in prior literature (Griffeth, Hom, and Gaertner 2000;Holtom, Mitchell, Lee, and Eberly 2008). This research generally suggests that turnover is disruptive to organizational operations and performance (Kacmar, Andrews, Van Rooy, Steilberg, and Cerrone 2006;Messersmith et al. 2014). Functional interpersonal relationships in executive teams take time to develop through experience working together. ...
We explore the impact of turnover within top executive teams, with particular emphasis on executives other than the CEO and chief financial officer (CFO), on auditors’ perceptions of financial reporting risk. Consistent with upper echelon theory, we find that non-CEO/non-CFO executive team turnover increases perceptions of financial reporting risk even with continuity of the CEO and CFO. Additionally, we find that the effect of CEO and CFO turnover on perceptions of risk is primarily driven by concurrent turnover with other top executive team members. Further, the effect of other top executive turnover is more pronounced among firms that had higher-ability managers and that face greater constraints in replacing top talent. This effect is partially mitigated when the firm has an effective financial reporting environment and when the CEO who remains in place has greater operational involvement. These findings highlight the importance of other top executive turnover in risk assessments.
Data Availability: Data are available from the public sources cited in the text.
JEL Classifications: G30; M12; M41; M42.
A focus on sustainable employability has recently become more prevalent in research and practice. The working population ages, and employers’ demand for work exceeds its supply, making the need for continued labour at later ages greater. Accordingly, the urgency of reducing sick leave is increasing. In this article the need for sustainable return-to-work trajectories is emphasised, as returning to work after sick leave can be challenging and often unsuccessful on the long term. I demonstrate the need for sustainable return-to-work trajectories by sketching the global issue of workplace absence and comparing how organisations in different countries respond to short-term and long-term sick leave. This comparison lays bare large gaps between theory and practice in recovery and return-to-work. Using insights from management science, industrial and organisational psychology, and occupational medicine, I reflect on ways to support a more sustainable (long-term) return-to-work, in which the emphasis is placed on sufficient time to recover and a contextualised, holistic approach to return-to-work. This approach is illustrated to be beneficial to both the employer and the employee.
Purpose
The purpose of this paper is to investigate publicly traded restaurant companies and food & beverage companies from 2014 to 2019 in Taiwan to explore their human capital efficiency.
Design/methodology/approach
According to the theoretical framework of human capital in micro and macro perspectives, the empirical model is built with two stages; the first stage is to examine the perspective of micro-level human capital theory through determining whether knowledge ability and working experience (proxies for micro-level human capital) can efficiently convert to employee-level output such as salary. The second stage is to test macro-level human capital theory through checking whether company inputs such as salary expenses and benefits expenditures can be efficiently transferred into enterprise annual revenues.
Findings
The results of this research reveal that the average efficiency score of stage 1 is 73.6% while that of stage 2 is 75.1%; this indicates that micro-level human capital has more room to improve than macro-level human capital. Meanwhile, the findings also demonstrate that there is negative relationship between efficiency score from stage 1 and turnover rate; this implies that companies with higher micro-human capital have lower turnover rates. Furthermore, there is significantly positive relationship between a company's efficiency score from stage 2 and its return on equity (ROE).
Originality/value
This study contributes to both academia and industry. From a theoretical perspective, the theory of strategic human resources management is applied through the methodology of production theory to examine human capital management efficiency in the restaurant and food and beverage industry. From a practical perspective, this study identifies the factors that assist the restaurant or food and beverage industry retain employees and gain a solid workforce, because manpower is the core resource for an industry and a country to grow sustainably.
On March 11, 2020, the World Health Organization declared COVID-19 a global pandemic, and organizational life around the world changed dramatically overnight. In response, there has been a flurry of management research that seeks to understand the wide-ranging implications of this crisis. In this article, we summarize a scoping review of 69 articles that focused on management issues during the pandemic to understand how it affected individuals, teams, leaders, organizations, and society at large. We also identify and discuss the theoretical perspectives that were prominent in these investigations. We conclude by identifying directions for future inquiry with a mind toward research questions that are likely to be relevant in a postpandemic workplace and note some implications for management scholarship as well.
Leaders who desire to leave the current organization are sometimes forced to stay. The leadership behaviors of these leaders are underexplored in the current literature. Building on proximal withdrawal states theory, this study examines two pathways through which leaders' reluctant staying mindset (i.e., desire but are unable to quit) relates to their subordinates' task performance and organizational citizenship behaviors (OCB). One pathway proposes increased laissez‐faire leadership behaviors due to leaders' lower intrinsic motivation; the second pathway proposes increased delegation behaviors due to leaders' higher extrinsic motivation. Using three‐wave data collected from 100 leaders and 313 subordinates, we found that leaders' reluctant staying was indirectly and negatively associated with subordinates' task performance and OCB through leaders' lower perceptions of task significance and higher laissez‐faire leadership behaviors. At the same time, leaders' reluctant staying increased their bottom‐line mentality and delegation behaviors, but the indirect effects on subordinates' performance outcomes were not significant. We discuss the implications of our findings for theory, practices, and future research regarding how to manage leaders who stay reluctantly in the organization.
A field investigation of 337 employees and their immediate superiors tested the mediating role of empowerment in relations between job characteristics, leader-member exchange (LMX), team-member exchange (TMX), and work outcomes. The meaning and competence dimensions of empowerment mediated the relation between job characteristics and work satisfaction. The meaning dimension also mediated the relation between job characteristics and organizational commitment. Contrary to prediction, empowerment did not mediate relations between LMX, TMX, and the outcome variables. Rather, LMX and TMX were directly related to organizational commitment. In addition,TMX was directly related to job performance. These findings suggest that work satisfaction is explained largely by job characteristics (through empowerment) but that LMX and TMX combine with job characteristics and empowerment to explain variation in organizational commitment and job performance.
Hom, Griffeth, and Sellaro's (1984) theoretical alternative to Mobley's (1977) turnover model was investigated in two studies. In Study 1, conceptual distinctions among model constructs and operationalizations of those constructs were validated. 206 nurses were surveyed, and constructs were assessed with multiple indicators. Although discriminating most constructs, structural equation modeling (SEM) identified a more parsimonious conceptualization in which a general construct underlies withdrawal cognitions. Other SEM analyses supported the indicators' construct validity and Hom et al.'s structural network. In Study 2, a longitudinal analogue of Hom et al.'s model was tested. A survey of 129 new nurses measured model constructs on three occasions. SEM disclosed that some causal effects in this model materialized contemporaneously, whereas others emerged after a lengthy time. Moreover, these causal effects systematically changed during newcomer assimilation. Implications for future research of turnover models are discussed.
This paper critically examines available theoretical models which have been derived from statistically established patterns of association between contextual and organizational variables. These models offer an interpretation of organizational structure as a product of primarily economic constraints which contextual variables are assumed to impose. It is argued that available models in fact attempt to explain organization at one remove by ignoring the essentially political process, whereby power-holders within organizations decide upon courses of strategic action. This `strategic choice' typically includes not only the establishment of structural forms but also the manipulation of environmental features and the choice of relevant performance standards. A theoretical re-orientation of this kind away from functional imperatives and towards a recognition of political action is developed and illustrated in the main body of the paper.
This study examined the relationship between human resource practices, employee quit rates, and organizational performance in the service sector. Drawing on a unique, nationally representative sample of call centers, multivariate analyses showed that quit rates were lower and sales growth was higher in establishments that emphasized high skills, employee participation in decision making and in teams, and human resource incentives such as high relative pay and employment security. Quit rates partially mediated the relationship hetween human resource practices and sales growth. These relationships were also moderated hy the customer segment served.
Two studies report a positive relationship of employees' perception of being valued and cared about by the organization with (a) conscientiousness in carrying out conventional job responsibilities, (b) expressed affective and calculative involvements in the organization, and (c) innovation on behalf of the organization in the absence of anticipated direct reward or personal recognition. In Study 1, involving six occupations, positive relationships of perceived support with job attendance and performance were found. In Study 2, using manufacturing hourly employees and managers, perceived support was positively related to affective attachment, performance outcome expectancies, and the constructiveness of anonymous suggestions for helping the organization. These results favor the extension and integration of emotion-based and calculative theories of organizational commitment into a social-exchange approach. (PsycINFO Database Record (c) 2012 APA, all rights reserved)
The leader–member exchange (LMX) literature is reviewed using meta-analysis. Relationships between LMX and its correlates are examined, as are issues related to the LMX construct, including measurement and leader–member agreement. Results suggest significant relationships between LMX and job performance, satisfaction with supervision, overall satisfaction, commitment, role conflict, role clarity, member competence, and turnover intentions. The relationship between LMX and actual turnover was not significant. Leader and member LMX perceptions were only moderately related. Partial support was found for measurement instrument and perspective (i.e., leader vs. member) as moderators of the relationships between LMX and its correlates. Meta-analysis showed that the LMX7 (7-item LMX) measure has the soundest psychometric properties of all instruments and that LMX is congruent with numerous empirical relationships associated with transformational leadership. (PsycINFO Database Record (c) 2012 APA, all rights reserved)
In this study, we investigate a central tenet of the resource-based view of the firm-that tacit knowledge often lies at the core of sustainable competitive advantage-and attempt to articulate it with greater theoretical precision than has been done previously. Using data from the National Basketball Association, we find support for a predicted positive relationship between shared team experience and team performance that declines as shared experience grows, eventually becoming negative. The implications of this study for non-sports-related firms are discussed along with suggestions for future research.
The manner in which the concept of reciprocity is implicated in functional theory is explored, enabling a reanalysis of the concepts of "survival" and "exploitation." The need to distinguish between the concepts of complementarity and reciprocity is stressed. Distinctions are also drawn between (1) reciprocity as a pattern of mutually contingent exchange of gratifications, (2) the existential or folk belief in reciprocity, and (3) the generalized moral norm of reciprocity. Reciprocity as a moral norm is analyzed; it is hypothesized that it is one of the universal "principal components" of moral codes. As Westermarck states, "To requite a benefit, or to be grateful to him who bestows it, is probably everywhere, at least under certain circumstances, regarded as a duty. This is a subject which in the present connection calls for special consideration." Ways in which the norm of reciprocity is implicated in the maintenance of stable social systems are examined.
In response to the recommendation that researchers examine the consequences of turnover instead of merely its determinants, we test nine hypotheses about how the turnover rate in organization work units influences integration, centralization, promotional opportunities, instrumental communication, job satisfaction, and behavioral commitment. Data from 115 work units in five organizations are studied using a longitudinal design which measures the impact of the work unit turnover rate for 8 months on the changes in the six variables over the 8-month period. After introducing numerous controls, turnover is found to have a net negative effect on instrumental communication and behavioral commitment. Implications for future research are discussed.
We develop a rule-based contingency misfit model and related hypotheses to test empirically the Burton and Obel (1998) multi contingency model for strategic organizational design. The model is a set of "if-then" misfit rules, in which misfits lead to a loss in performance; they are complements to the strategy and organizational contingency theory fit rules. Using data from 224 small- and medium-sized Danish firms, misfits are categorized and identified. Then, performance hypotheses are developed and tested using regression models. We confirm the hypotheses that firms with situational misfits or contingency misfits, or both, incur performance losses in return on assets compared with firms with no misfits. Contrary to our hypotheses, we did not find that additional misfits lead to increased performance loss. Our results suggest that just one misfit of any kind may significantly compromise performance. These results yield a deeper understanding of organizational contingency theory, as well as implications for the rule-based fit-misfit organizational design model.