Moving on: Exploring the implications of leader departure and incoming temporary leaders for collective turnover and unit performance.

Abstract

While leader departures from work units frequently occur within organizations and are assumed to negatively impact unit functioning, the collective reaction to a leader departure event can vary across time. While a common expectation of leader departure models is that the incoming leader is permanent, it is unclear how unit-level reactions, such as collective turnover and unit performance, might change over time in response to a departure event when the departing leader is replaced with a temporary leader. We draw on context emergent turnover (CET) theory and literature on leader departures to develop and empirically test specific hypotheses exploring relationships among leader departures, collective turnover, and unit performance over time. In addition, we examine the extent to which these relationships are influenced by the temporary status of the incoming leader. Using discontinuous growth models, we examine a longitudinal data set from 324 units within a large Latin American operation of a global direct sales company (N = 3,082 performance periods). Findings indicate that, after a leader departs, there is an immediate increase in collective turnover and that unit performance decreases over time. Further, when the incoming leader is temporary, unit performance increases briefly, but the rate of performance drops over time. Overall, our research offers insights with regard to how leader departures impact unit outcomes, as well as how long such effects last.