Quits Versus Discharges Across Job Levels: Revisiting the Positive Side of Turnover

Abstract

Although the functional effects of turnover have been argued from the earliest research in the field, empirical evidence so far supports a general negative effect on unit performance, and attempts to explore its potential benefits are scarce. It has been argued that one reason for the absence of positive effects has to do with a lack of specificity of the turnover construct. The present study focuses on two sources of specificity: the reason for turnover and the job level of the departing employees. Our objective is to perform integrative research to analyze their joint effects and discuss how the four turnover scenarios created by their combination make their potential benefits of departures salient. We integrate arguments from human and social capital theories with the literature on team adaptation and change to develop our conceptual framework, and test our hypotheses using longitudinal monthly data from 5,202 stores of a large fashion multinational retailer in 39 countries. Our results provide evidence of a curvilinear relationship between staff quits and unit performance, and show that discharges are linearly beneficial both for managerial and staff positions, although at different degrees. Our findings demonstrate that differentiating between quits and discharges matters, and that the relative value conveyed by the job level of the departing employees is a relevant contingency in this distinct effect over performance.

Performance Costs and Benefits of Collective Turnover: A Theory-Driven Measurement Framework and Applications

“…Yet another theoretical alternative predicts that low-to-medium turnover could benefit performance by revitalizing the workforce, but high turnover is more costly and less beneficial. This prediction corresponds to an inverted quadratic U-shape (𝑎 1 > 0, 𝑎 2 < 0) found in 35 out of 156 TPR studies surveyed in Hancock et al (2017) (Table 3) and later in De Stefano et al (2019); DeWinne et al (2019); Simón et al (2022), and in Li et al (2022). 2 However, a quadratic U-shape is simply an empirically convenient approximation of a generally nonlinear TPR whose pattern is determined by co-variation in the costs and benefits of turnover with its level.…”

“…We consider controls for workplace size, workplace-and time-specific fixed effects, and past performance essential. Past performance accounts for past shocks that may have influenced turnover decisions and whose consequences may persist over several periods of time, which is particularly important for relatively high-frequency (quarterly or monthly) observations used in recent TPR studies (De Stefano et al, 2019;Simón et al, 2022) as well as ours. Workplace size controls for the scale of operations which clearly affects output and may also be related to turnover.…”

“…Turnover is costly because it depletes firm-specific human capital, disrupts communications, and takes resources to manage. Yet it may also bring benefits, of which ridding the workforce of poorly performing workers is most frequently mentioned (Abelson & Baysinger, 1984;Dalton & Todor, 1979;Glebbeek & Bax, 2004;Siebert & Zubanov, 2009;Simón et al, 2022;Trevor & Piyanontalee, 2020). 1 As the benefits and costs of turnover often coincide (e.g., the departure of an unproductive worker is good riddance but it may disrupt operations nonetheless), a linear regression of performance on turnover, which is the empirical model choice in many studies (see Table 1 in Shaw (2011) for a summary), would capture the net effect of these two opposing forces averaged over the study sample.…”

From a spark to a sweeping fire: An integrative conceptual review of group turnover and a theoretical exploration of its development.

“…This includes consequences for the firm the group departed, the firm(s) its members join, and the departing group itself—both collectively and individually. Although some research has discussed turnover’s potential functional and adaptive nature (Dalton et al, 1982; Simón et al, 2022; Wiersema & Bantel, 1993), most has focused on its adverse effects, such as the greater organizational risk of successive quitting versus that of dispersed departures (Agarwal et al, 2016; Call et al, 2015; Mawdsley & Somaya, 2016; Wezel et al, 2006). Some has even speculated that in times of impending turnover, exiting groups may behave opportunistically by withholding work contributions until joining the new firm (Černe et al, 2014; Connelly et al, 2012).…”

Impact of Articled Clerk Turnover on Audit Quality: A Study of BDO Zimbabwe Chartered Accountants

“…A study conducted in China (Knechel et al, 2021) revealed a decline in audit quality for clients remaining with firms after proficient auditors had moved to more prestigious companies. While the introduction of new perspectives through employee turnover can be beneficial, prevailing views in the audit sector suggest that resignations detrimentally affect effectiveness and compromise the quality of the product (Simón et al, 2023). Interviews with auditors highlighted that high staff turnover leads to shortages, resulting in increased workload pressure, which in turn exacerbates staff turnover.…”