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TURNOVER INTENT
DIPLOMA THESIS
Department: Strategie- und Unternehmensökonomik
University of Zurich
Human Resource Management
Professor Dr. Bruno Staffelbach
Supervising tutor: Dorothea Brunner
Subject area: BWL I
Subject: Human Resource Management
Author: Mylene Perez
Schüracherstr. 14a, 8306 Brüttisellen
Student ID Number: 02-728-285
Field of Study: BWL (Business Administration)
Number of Semester: 10
Brüttisellen, 18.06.2008
1 Turnover Intent
ABSTRACT
Voluntary employee turnovers incur significant cost for an organization. Thus it is important to
identify turnover intents as early as possible in order to enable planners to help implement
courses of action. Within the scope of this diploma thesis a review of literature on turnover intent
is offered. Initially the importance of the phenomenon is established and exact definitions of the
subject area are presented. Subsequently the potentially critical impact of turnover behavior on
organizational effectiveness is discussed. Several theoretical concepts that explain the occurrence
of the turnover intent, and five key models that shaped the research on turnover, are presented
and partially critiqued. This study also analyzes the effect of various factors on turnover intent
using data from the HR-Barometers 2007. These factors were categorized into psychological,
economical and demographic determinants, as well as moderating factors. The results revealed
that the psychological determinants, such as psychological contract and job satisfaction, were the
strongest significant predictors of future quits.
Freiwillige Kündigungen von Arbeitnehmenden sind für Unternehmen mit sehr hohen Kosten
verbunden. Es ist daher von zentraler Bedeutung die Kündigungsabsichten schon frühzeitig zu
erkennen, um ihren Ursachen entgegen wirken zu können. Im Rahmen dieser Diplomarbeit wird
ein Literaturüberblick über Kündingsabsichten aufgezeigt. Zunächst einmal wird die Relevanz
dieses Phänomens erklärt und dann werden verschiedene Begriffe von diesem Themenbereich
definiert. Danach werden potenzielle und kritische Auswirkungen des Kündigungsverhaltens auf
die Effektivität der Unternehmen untersucht. Einige theoretische Konzepte, welche die
Entstehung von Kündigungsabsichten erklären, wie auch fünf entscheidende Modelle, welche die
Forschung über Kündigungen geprägt haben, werden vorgestellt und zum Teil kritisch analysiert.
Diese Arbeit untersucht auch verschiedene Ursachen von Kündigungsabsichten, dies mittels
einer empirischen Analyse der Daten des HR-Barometers 2007. Die Ursachen wurden in
psychologische, ökonomische und demographische Determinanten, sowie Moderatoren
unterteilt. Es wird gezeigt, dass psychologische Determinanten, wie der Psychologische Vertrag
und Arbeitszufriedenheit, die stärksten Prädiktoren von zukünftigen Kündigungen sind.
Keywords: TURNOVER INTENT, VOLUNTARY TURNOVER, JOB MOBILITY
2 Turnover Intent
Contents
1. Introduction ............................................................................................................................... 6
1.1. Starting Position ...................................................................................................................... 6
1.2. Turnover in Switzerland ........................................................................................................... 6
1.3. The Purpose of the Study ......................................................................................................... 8
1.4. Procedure ................................................................................................................................ 9
2. Theoretical Background ............................................................................................................ 11
2.1. Definitions ........................................................................................................................ 11
2.1.1. Turnover ................................................................................................................... 11
2.1.2. Turnover Intent .......................................................................................................... 14
2.2. Consequences of Turnover ................................................................................................. 15
2.2.1. The Impact of Turnover on Organizational Cost ........................................................... 15
2.2.2. Operational Disruption ............................................................................................... 16
2.2.3. Demoralization of Organizational Membership ............................................................ 16
2.3. Reference Theories Explaining Voluntary Turnover Intent Behavior .................................... 18
2.3.1. Social Exchange Theory ............................................................................................. 18
2.3.2. Human Capital Theory ............................................................................................... 18
2.3.3. Search Theory ........................................................................................................... 19
2.3.4. Matching Theory ....................................................................................................... 20
2.3.5. Equity Theory ............................................................................................................ 20
2.3.6. Organizational Equilibrium Theory ............................................................................. 21
2.4. Turnover Process Models .................................................................................................. 23
2.4.1. March & Simon’s Model ............................................................................................ 23
2.4.2. Mobley’s Model ........................................................................................................ 25
2.4.3. Sheridan and Abelson’s Model ................................................................................... 26
2.4.4. Price and Mueller’s Model ......................................................................................... 29
2.4.5. Lee and Mitchell’s Model ........................................................................................... 31
2.4.6. Conclusion ................................................................................................................ 33
3. Factors that have an Impact on Turnover Intent .......................................................................... 34
3.1. Determinants ......................................................................................................................... 35
3.1.1. Psychological determinants ........................................................................................ 36
3 Turnover Intent
3.1.2. Economic determinants .............................................................................................. 42
3.1.3. Demographic determinants ......................................................................................... 44
3.2. Moderators ............................................................................................................................ 45
3.2.1. Gender ...................................................................................................................... 46
3.2.2. Education .................................................................................................................. 46
4. Methodology ............................................................................................................................ 48
4.1. Procedure .............................................................................................................................. 48
4.2. Data set: “HR-Barometer 2007” .............................................................................................. 48
4.3. Participants ........................................................................................................................... 48
5. Results ..................................................................................................................................... 51
5.1. Statistical Analysis ............................................................................................................ 51
5.1.1. Psychological Determinants of Turnover intent ............................................................ 51
5.1.2. Economic Determinants of Turnover intent ................................................................. 53
5.1.3. Demographic Determinants of Turnover intent ............................................................ 54
5.1.4. Integrated Model of Turnover ..................................................................................... 55
5.1.5. Moderators ................................................................................................................ 56
5.2. Discussion ........................................................................................................................ 59
6. Summary ................................................................................................................................. 62
6.1. Research results ................................................................................................................ 62
6.2. Limitations ....................................................................................................................... 63
6.3. Future Research ................................................................................................................ 63
6.4. Conclusion ....................................................................................................................... 66
7. References ............................................................................................................................... 67
4 Turnover Intent
Figure and Table Contents
Figure 1: Development of Turnover Rate 1996-2005 ..................................................................... 7
Figure 2: Turnover Intent: An International Comparison ............................................................... 8
Figure 3: Avoidability-Matrix ....................................................................................................... 13
Figure 4: Simplified Version of March and Simon’s Model ........................................................ 24
Figure 5: Mobley’s Employee Turnover Decision Process Model ............................................... 26
Figure 6: Sheridan and Abelson’s Cusp-Catastrophe Model ........................................................ 28
Figure 7: Price and Mueller’s Causal Model ................................................................................ 30
Figure 8: Lee and Mitchell’s Unfolding Model ............................................................................ 32
Figure 9: A General Illustration of Turnover ................................................................................ 34
Figure 10: Turnover Intent Response-HR Barometer 2007 .......................................................... 49
Figure 11: Turnover Intent by Industry HR-Barometer 2007 ....................................................... 50
Figure 12: Gender Effect on the Relationship between Commitment and Turnover intent ......... 56
Figure 13: Gender Effect on the Relationship between Job Satisfaction and Turnover intent ..... 57
Figure 14: Moderator Education-Gender-Turnover Intent............................................................ 58
Table 1: Definition Voluntary and Involuntary Turnover ............................................................. 12
Table 2: Relationship between Actual Turnover and Turnover Intent .......................................... 14
Table 3: Several Categories of Expenses by Cascio ..................................................................... 16
Table 4: Determinants for Voluntary Turnover Subdivided into Categories ................................ 35
Table 5: Bipartisan Expectations................................................................................................... 37
Table 6: Regression Psychological Determinants of Turnover Intent .......................................... 52
Table 7: Regression Determinants of Job Satisfaction.................................................................. 53
Table 8: Regression Economic Determinants of Turnover Intent ................................................. 54
Table 9: Regression Demographical Determinants of Turnover Intent ........................................ 54
5 Turnover Intent
Table 10: Regression Integrated Model of Turnover Intent .......................................................... 55
Table 11: Regression Moderator Education-Age-Turnover Intent ............................................... 58
List of Abbreviations
e.g. = Exempli Gratia (for example)
et al. = Et alii (and others)
HR = Human Resource
ISSP = International Social Survey Program
p. = Page
SAKE = Schweizerische Arbeitskrafterhebung
6 Turnover Intent
1. Introduction
1.1. Starting Position
As several authors point out (e.g. Price, 2001/Hom&Griffeth, 1991), turnover is one of the most
researched phenomena in organizational behavior. In this research, as it is typical for most
studies on turnover, the focus was on members leaving rather than entering the organization,
furthermore the attention was on voluntary turnovers. The broad range of turnover studies is
indicative of the significance and complexity of the issue. The phenomenon attracts interest due
to its psychological dimension, its organizational significance, and its economic dimension.
A topic strongly related to voluntary job mobility is “turnover intention”. In this study “turnover
intent” rather than “turnover” was used as the dependent variable. The importance of analyzing
turnover intention draws upon a number of recent research papers (e.g. Mobley, 1977/
Hom&Griffeth, 1991) that have assessed its role in forecasting and understanding actual quits.
Turnover intention was reported to be highly correlated with actual turnover.
Voluntary turnovers create significant cost, both in terms of direct cost, such as replacement, or
in terms of indirect cost, such as the pressure on remaining staff or the loss of social capital
(Staw, 1980). Explanation of voluntary turnover has relevant implications for organizational
manpower planning. It is important to identify turnover intent as early as possible in order to
enable planners to help implement courses of action.
1.2. Turnover in Switzerland
The turnover issue also plays a major role in Switzerland. The most recent study about job
mobility in Switzerland was conducted by Henneberger and Sousa-Poza in 2007. They revealed
that the macroeconomic turnover rate tends to follow the economic trend (Hennberger&Sousa-
Poza, 2007: p. 17). It has increased since the mid-90s until 2000 (with the lowest rate in 1997,
where unemployment showed the highest rate). It remained at the same stage for the next two
years, and subsequently decreased since 2002. This development is illustrated in Figure 1. Their
empirical examination was based on SAKE (Schweizerische Arbeitskrafterhebung) and thereby
resulted a turnover rate of 9.7% in year 2005. Therewith around 300’000 employees in
Switzerland are yearly changing their job (Henneberger & Sousa-Poza 2007: p. 17).
7 Turnover Intent
Disaggregated by industry, the results showed that the turnover rate is particularly high in the
“hotel and restaurant industry” as well in the area of “real estate, renting, information
technology”. The lowest rate is registered in “public industry” (Henneberger & Sousa-Poza
2007: p. 82).
Figure 1: Development of Turnover Rate 1996-2005
(SAKE in Henneberger&Sousa-Poza, 2007: p. 33)
An international comparison of turnover intent based on the International Social Survey Program
(ISSP) about “Work Orientations” in 2005 is illustrated in Figure 2. The question was “How
likely: try to find a job within the next 12 months”. The results showed that Switzerland has a
quota of 8.74%, which is 1.21% percentage point below the average turnover rate of 9.95% of all
the 32 analyzed countries (see Figure 2). Particular high turnover rates resulted next to France
(17.48%) and Mexico (17.42%), USA (15.08%), Dominican Republic (14.63%), New Zealand
(14.47%) and Australia (14.26%). Low turnover rate was shown in Japan (3.74%) and Czech
Republic (3.11%). The low rate in Japan can be explained by the prevalent lifelong employment
relations (Henneberger&Sousa-Poza 2002: p. 100).
8 Turnover Intent
Although Switzerland’s turnover rate has declined over the past years, it would be too early to
argue that this could be a persistent trend. This still needs to be observed during the following
years. Thus the turnover issue remains to be important in Switzerland.
Figure 2: Turnover Intent: An International Comparison
(ISSP 2005)
1.3. The Purpose of the Study
Owing to the importance of job mobility in the Swiss labor market, turnover became an
important issue for the HR-Management. Since voluntary turnovers implicate various
consequences, it is necessary to detect them at an early stage. Preventing unintentional job
mobility can be accomplished by understanding turnover intent, since it has been examined as
the immediate precursor to actual turnover. Revealing turnover intent can help forecasting actual
quits.
9 Turnover Intent
There are well established traditions of using models in research and dispersion of theory about
turnover behavior. Several theories and key models need to be discussed, in order to understand
reasons and backgrounds of this phenomenon. Therefore one purpose of this study is:
a) To examine several theories, how they describe and explain reasons for turnover,
respectively turnover intention.
When it comes to interpreting turnover behavior and understanding the enormous impact the
issue discussed, several factors on turnover intent have to be examined. Based on theoretical
backgrounds, these factors need to be evaluated with an empirical analysis. The second purpose
of this study is:
b) To conduct an empirical derivation of factors that have an impact on turnover intent of
Swiss employees based on the HR Barometer 2007.
1.4. Procedure
The aim of this study is to provide an overview about the theoretical background of turnover
intent. Additionally an empirical analysis, based on the HR Barometer 2007, needs to be carried
out in order to understand the different impact of factors on turnover intent. The present study is
structured in six chapters, which is illustrated on the following page.
The first chapter provides an introduction of the topic. Initially the importance of the subject area
is established. The purpose is being defined and the procedure becomes apparent. The second
chapter offers a theoretical background of the turnover phenomenon, starting with exact
definitions followed by the presentation of the potentially critical impact of turnover behavior on
organizational effectiveness. Further, theoretical concepts will be presented and then related to
the occurrence of turnover intent. Established models that have shaped the turnover research are
discussed and critiqued. In the third chapter, factors that have an impact on turnover intent are
categorized into psychological, economic and demographic determinants as well as moderating
variables. An empirical analysis, based on HR-Barometer 2007, will be conducted in order to
evaluate the different suppositions. The final chapter implies a summary of the core findings and
offers suggestions for future investigations.
10 Turnover Intent
1. Introduction - Starting Position
- Turnover Intent in Switzerland
- Purpose of the Study
- Procedure
2. Definitions 3. Consequences of Turnover - Turnover - Impact on Organizational Cost
- Turnover Intent - Organizational Disruption
- Demoralization of Organizational membership
4. Reference Theories - Explaining turnover behavior with established theories
5. Turnover process - Presenting key models that shaped the turnover research
6. Factors - Determinants
Based on HR Barometer 2007
- Moderators
7. Empirical Analysis based on HR Barometer 2007
8. Overall Summary and Future Research
11 Turnover Intent
2. Theoretical Background
2.1. Definitions
2.1.1. Turnover
Turnover is defined as the “individual movement across the membership boundary of an
organization” (Price, 2001: p. 600). The concept “individual” refers to the employees within an
organization and the notion of movement can be interpreted either as an accession or a separation
of the company. In turnover literature, authors also used other labels for turnover, such as quits,
attrition, exits, mobility, migration or succession. A crude measurement of turnover would be
(Morrell et. al, 2001: p. 10):
Leavers in year
x 100
Average number of employees during year
However, this measurement of turnover is rarely used, since it fails to distinguish between cases
where individuals have decided to leave and cases where they had to leave, as well as ignoring
the reasons why they leave is important to consider (Morrell et al., 2001: p. 10). Therefore three
fundamental characteristics of turnover will have to be discussed: voluntariness, avoidability and
functionality. It should be emphasized that this study’s concern would be the voluntary,
avoidable and dysfunctional turnover.
Voluntariness
Since turnover is often associated with variables, such as job satisfaction, it is important to
distinguish voluntary from involuntary turnover, otherwise the estimation of such a relationship
in terms of all leavers will be inaccurate. Most of the researches’ attention was concentrated on
the members, which voluntarily leave the organization, since most of the turnovers are voluntary
and subject to control by managers (e.g. Morrell et al., 2001/Price, 2001). Managers focus their
attention on a phenomenon capable of some degree of control. A wide range of determinants
have been found useful when it comes to interpreting voluntary turnover. It is known that a high
amount of voluntary turnover adversely affects organizational effectiveness.
12 Turnover Intent
Table 1: Definition Voluntary and Involuntary Turnover
Types Definition Examples
Voluntary turnover “..voluntary cessation of membership of
an organization by an employee of that
organization.”(Morrell et al., 2001: p. 6)
� Resignation
Involuntary turnover “..movement across the membership
boundary of an organization, which is
not initiated by the employee.” (Price,
1977: p. 9)
� Dismissal
� Retrenchment
� Death
Avoidability
Another important consideration for the organizational concern is the “avoidability” of voluntary
turnover. It deals with the question whether the decision to leave could have been prevented by
the organization. This is important for the planning of interventions. For instance, if a company
identifies their voluntary turnover is unavoidable (e.g. relocation by a spouse), it would be more
beneficial to manage turnover post hoc, rather than to spend on theorized preventive measures,
such as increasing pay. These losses of employees can also be described as “necessary
causalities” (Morrell et al., 2004: p. 164). In this case, managers focus on minimizing the
disruption and inconvenience of the lost. Yet, if the reason for voluntary turnover is avoidable,
then managers have the possibility to intervene in order to prevent the cessation. Unfortunately a
pure split is not feasible. When managers sometimes assume turnovers being inevitable, but in
real terms are avoidable, they may fail to detect underlying issues in the organization. The
associated costs of the lost of employees may be unnecessary tolerated, whereas prevention have
been more beneficial. In contrast when the perceived voluntary turnover is seen as avoidable, but
in reality it was unavoidable, managers could spend money on useless prevention measures
(Morrell et al., 2001: p. 9). This is illustrated in Figure 3.
13 Turnover Intent
Figure 3: Avoidability-Matrix
(Morrell et al., 2001: p. 60)
Functionality
Most studies on turnover have associated turnover with a negative impact on organizational
effectiveness. Dalton et al. (1981) modified this perspective. Their study distinguished two types
of leavers, in terms of their “productivity and the extent to which they are an asset to the
organization” (Morrell et al., 2001: p. 12). It shows that turnover can also be beneficial for an
organization. An example for a functional turnover would be the replacement of unproductive
employees with productive ones, thus dysfunctional turnover would be interpreted as losing
productive employees. For managers it is important whether a turnover brings an opportunity to
gain more productive employees (for functional turnover) or forces them to reorganize current
work settings (for dysfunctional turnover). (Morrell et al., 2001: p. 12)
14 Turnover Intent
2.1.2. Turnover Intent
Unlike actual turnover, turnover intent is not explicit. Intentions are a statement about a specific
behavior of interest (Berndt, 1981: p. 636). Turnover intent is defined as the reflection of “the
(subjective) probability that an individual will change his or her job within a certain time period”
(Sousa-Poza&Henneberger, 2002: p. 1) and is an immediate precursor to actual turnover. A
broad range of literature examining the relationship of turnover intent and actual turnover (e.g.
Mobley, 1977/ Hom&Griffeth 1991) exists. Actual intention and turnover intention have been
measured separately; however, actual turnover is expected to increase as the intention increases.
The results of the different studies provide support for the high significance of turnover intention
in investigating the individual’s turnover behavior. Turnover intention captures the individual's
perception and evaluation of job alternatives (Mobley et al., 1979).
In Henneberger and Sousa-Poza’s study, it resulted that the decision on job mobility is rather
been made by employees in the short run (Hennberger&Sousa-Poza, 2007: p. 20). Not all
employees who intended to change their job had an actual turnover. On the contrary, employees,
who did not intend it, had actual turnovers (see Table 2). It shows that, on the one hand,
employees react quite sensitive to sudden appeared options; on the other hand, employers should
be able to prevent successful employees from job mobility.
Table 2: Relationship between Actual Turnover and Turnover Intent
No Job Mobility Job Mobility Total
Turnover intent not
announced in 2004 95.39% 4.61% 90.48%
Turnover intent
announced in 2004 74.81% 25.19% 9.52%
93.43% 6.57% 100%
Note: Spearman-Correlation coefficient = 0.2343 (1% significance level)
(SAKE 2004/2005-Henneberger&Sousa-Poza, 2007: p. 102)
15 Turnover Intent
2.2. Consequences of Turnover
The purpose of this chapter is to discuss the different consequences of turnover and to point out
turnover as a crucial organizational issue. Although turnover may also bring positive
consequences for instance the reallocation of organizational resources (Staw, 1980: p. 258), this
study’s focus will be on negative consequences of turnover. Three important negative
consequences, which have an impact on organizational effectiveness, will be discussed below:
the impact on organizational cost, operational disruption and demoralization of organizational
membership.
2.2.1. The Impact of Turnover on Organizational Cost
Organizational efficiency has been shown to be highly correlated with a low turnover rate.
Studies dealing with the impact of turnover are dominated by a concern with organizational
effectiveness, which is defined “as the extent to which the system achieves its goals “(Price,
1977: p. 110). The financial impact of turnover is usually expressed in monetary terms. Cascio in
1991 made the most significant contribution in this respect, discussing the extent to which
turnover cost are important (Tziner&Birati, 1996). Table 3 illustrates his model that consists of
categories of expenses. According to Cascio, the summation of the components of the three
major categories should constitute the expense of an employee turnover (Tziner&Birati, 1996: p.
114).
Additionally, several other studies extended Cascio’s list with further categories. In Tziner and
Birati’s study (1996) they argued that Cascio neglects to discuss the distinction between
functional and dysfunctional turnover, namely the “cost of the reduced productivity of the new
worker during the period required for the level of performance of the previous employee to be
reached” (Tziner, 1996; p. 114). If bad performers choose to leave, this could carry beneficial
outcomes for the organization. However, if it is a dysfunctional turnover, then the loss of an
esteemed employee can engender a loss of productivity. Another category is named the “vacancy
costs” that refers to the expenses that incurred due to increased overtime or temporary workers
that are employed to complete the tasks of the vacant position (www.uwex.edu).
16 Turnover Intent
Table 3: Several Categories of Expenses by Cascio
Separation Cost � the costs incurred for exit interviews
� administrative functions related to termination
� separation/severance pay
Replacement Cost � advertising position availability in various media
� entrance interviews
� holding decision making meetings
Training Cost � Norms of conduct and performance
� Disseminating relevant information for organizational
socialization
� Participation in on-the-job training activities
(Tziner et al, 1996: p.114)
2.2.2. Operational Disruption
Operational disruption occurs when high interdependence of work roles within the company
exists. The loss of key members in an organization which is characterized as being highly
interdependent and specialized can influence the ability of other remaining members to fulfill
their work task. In some companies higher turnover rate is expected to find in lower hierarchy
levels. Replacing these positions is not that difficult for the organization. The author argued that
“the higher the level of position to be filled the greater the potential for disruption” (Staw, 1980:
p. 256). This problem can be solved with back up personnel or employees can be trained with
multiplicity skills. (Staw, 1980: p. 256)
2.2.3. Demoralization of Organizational Membership
The demoralization of organizational membership refers to the impact of turnover on attitudes of
the remaining members. If a person decided to leave for an alternative position in an external
environment, it may provoke a reflective sentiment with remaining members, such as
17 Turnover Intent
questioning their own motivation to stay in the organization. Thus turnover can cause additional
turnover by stimulating deterioration in attitudes towards the organization. (Staw, 1980: p. 257)
The perceived reason of leaving is one essential factor for demoralization of organizational
membership. If the reason for quitting is a non-organizational matter, such as family issues or
location change, then the feeling of demoralization is less existent. Yet if the reason is rather
dependent on organizational dimensions, such as pay or supervisory support, then it will likely
lead to demoralization. “If those who leave are members of a cohesive work group or possess
high social status among the organizational membership, then turnover will likely lead to greater
demoralization” (Staw, 1980: p. 257).
18 Turnover Intent
2.3. Reference Theories Explaining Voluntary Turnover Intent Behavior
2.3.1. Social Exchange Theory
Social exchange theory is based on the idea that social behavior is the result of an exchange
process, whose purpose it is to maximize benefits and minimize costs. The beginnings of this
theory can be traced to the studies of Thibaut and Kelley, Homans and Blau (Brinkmann&Stapf,
2005: p. 24). The exchange can be understood in terms of material and non-material goods, such
as the symbols of approval or prestige (Homans, 1961: p. 12). According to this theory,
individuals consider potential reward and risks of social relationships. Further it implies that all
human relationships are shaped by using a subjective reward-cost analysis and the comparison of
alternatives. Someone who gives much will expect to get at least the same amount back from
others and in return persons that receive a lot from others will be under pressure to give much
back to them. People will terminate or abandon the relationship as soon as the costs outweigh the
benefits (Farmer&Fedor, 1999: p. 352).
The viability of social exchange theory is based on the assumption that individuals recognize
one’s life situations and notice each one’s needs. It also refers to the principal of reciprocity,
whereby privileges granted by one are returned by the other. The interaction between humans
will be noticed consciously and in some way reciprocated. The willingness to generate an
advance performance will be responded with a payback, either soon or with a time delay.
(Brinkmann&Stapf, 2005: p. 24)
2.3.2. Human Capital Theory
The core thesis of human capital theory is that human’s learning functions are comparable with
other natural resources which are involved in the production process (Becker, 1993). The
theory’s roots are in the work of Adam Smith or William Petty. Yet it was Gary Becker who
extensively developed the human capital theory in 1964. The concept of human capital claims
that not all work is equal and that the employees’ quality can be increased by investing in them
(Becker, 1993). According to Becker (1993), education and training are the most important
investment in human capital. Learning capacity is closely related to earning level, thus it can
raise a person’s income. The earnings of more educated people are mostly above average. The
19 Turnover Intent
education, experience and skills of a worker have an economic value for employers and for the
economy as a whole. It emphasized that effective employees have to be constant learners in order
to compete in an increasingly globally competitive enterprise environment. Hence occupational
wage differentials refer to the amount of investment in human capital (Henneberger&Sousa-
Poza, 2007: p. 53).
There are two major forms of human capital investment; schooling and on-the-job training.
Becker defined a school as an “institution specializing in the production of training” (Becker,
1993: p. 51), such as university or high school. On-the-job training relates to the increasing
productivity of employees by learning new skills and perfecting old ones while on the job
(Becker, 1993: p. 31). It can be distinguished between general and specific training. Training can
be seen as general, if the acquired skill can also be used in another company. For example, a
doctor trained in one hospital finds his skills also beneficial at other hospitals (Becker, 1993: p.
33); whereas specific training is defined as “training that has no effect on the productivity of
trainees that would be useful in other firms” (Becker, 1993: p. 40). The development of
capability requires both specialization and experience and can be gained partly from schools and
partly from companies.
Employees that possess a high amount of company specific training will hardly find alternatives
that meet their expectations, such as wages. Based on this theory, it can be assumed that
company specific training has an inverse relationship to turnover intent. The higher the
investments are on specific knowledge, the higher the considered transaction costs
(Henneberger&Sousa-Poza, 2007: p. 53).
2.3.3. Search Theory
The search theory can be traced back to George Stigler’s analysis how buyers (or sellers) acquire
information as an investment. He argued that “a buyer (or a seller) who wishes to ascertain the
most favorable price must canvass various sellers (or buyers)” (Stigler, 1961: p. 213). A special
concern in this study is the worker’s optimal strategy when choosing from various potential
opportunities in the labor market. The individual imperfect knowledge of labor market variables
requires the usage of a so called “reservation price” for the search of employment various
alternatives (Morrell et al., 2001: p. 23). Reservation price is defined as “the lowest salary or
20 Turnover Intent
wage at which a person will consider accepting a job and can be thought of as a short-hand
heuristic which people use to decide whether to accept / reject a job offer in the face of little
other information from the labor market” (Holt and David, 1966 in Morrell et al., 2001: p. 23). It
is seen as endogenously determined, suggesting that it depends on opportunities in the labor
market (Morrell et al., 2001: p. 23).
For employees, search generates alternative positions or workplace outside the present
organization, which can lead to actual turnover. Therefore job search was detected as an
important precursor to quitting in several studies (e.g. Mobley et al., 1979). Job search can also
lead to the appreciation of one’s present job after comparing it with the alternatives (Morrell et
al., 2001: p. 24).
2.3.4. Matching Theory
Matching Theory describes a process where humans or other organisms “distribute their behavior
in relation to the rate of reinforcement for response alternatives” (Mace, 1990: p. 197). It gives
an understanding about the appearance and the termination of a work contract under uncertainty.
Employees strive for those positions which match best with their capabilities that correlate with
appropriate wages. Employers tend to fill positions, so that they can maximize their benefit
(Henneberger&Sousa-Poza, 2002: p. 28). Employee’s productivity in a particular job is not
known in advance but rather appears precisely as the worker’s job tenure increases (Jovanovic,
1979). The benevolence of a “match” reveals in the course of the employment relationship.
Therefore younger employees launch an experimental stage at the beginning of their professional
life, where they gain experiences and diminish lack of information. In this context, job mobility
can be understood as a mechanism for correcting matching failures (Henneberger&Sousa-Poza,
2002: p. 28).
2.3.5. Equity Theory
Equity theory, also known as justice theory, was developed by John Stacey Adams in 1963 and
can be categorized in job motivational theory. It proposes that individuals determine whether the
distribution of resources is fair to both relational partners (Brinkmann&Stapf, 2005: p. 26). In
organization, the Equity theory of employee motivation describes the fair balance to be struck
21 Turnover Intent
between an employee’s inputs, such as hard work, skill level, tolerance or enthusiasm and an
employee’s outputs, such as salary, benefits or intangibles issues. Justice is existent, when inputs
and outputs are fairly distributed among the participants, whereas the impartial criteria of the
situation are less important than the way, how individuals estimate the value and the relevance of
the inputs and outputs of the different participants (Brinkmann&Stapf, 2005: p. 26). Thus a
highly motivated employee perceives his rewards to be equal to his contributions. He will judge
to be treated fairly, when he feels that he is working and being rewarded at about the same rate as
his peers. It should be emphasized that factors can affect each person’s assessment and
perception of their relationship with their relational partners differently; hence every employee
does not measure his contributions in the same way. According to Leventhal, employees evaluate
the fairness of the procedural justice regarding following criteria (Brinkmann&Stapf, 2005: p.
27):
� The procedure must not contradict ethical standards.
� The allocation has to be applied consistently over time and people.
� Decisions have to consider the interest of everyone.
� The person, who uses the procedural method, should not be influenced by self-interest.
� The procedural method should contain correction possibility in order to revise decisions,
for instance through objection.
Based on the Equity theory, if an employee perceives the distribution of resources as unfair, then
turnover intent will emerge.
2.3.6. Organizational Equilibrium Theory
Barnard provided a systematic framework where he discussed human motivations that are
involved in the decision to belonging, which is also known as the organizational equilibrium. He
argued that “the equilibrium of an organization means the capacity to maintain efficiency of an
organization” (Mano, 1994: p. 17). Organizations are dependent on the continuity of
participants’ contributions and in order to maintain this, organizations have to offer equitable
inducements. Thus Barnard’s specific evolution is the decision to participate, in other words
22 Turnover Intent
“balancing of burdens by satisfactions which results in continuance” (Barnard, 1938: p. 57).
According to Barnard, if the personal sacrifice is bigger than the inducements he gets, then the
person will withdraw his contributions and will leave the company.
Simon extended Barnard’s theory into the Barnard-Simon Organizational Equilibrium theory,
which builds on Barnard’s observations. Simon argued that the achievement of organizational
equilibrium contains the condition that the sum of contribution of all employees ensures the
kinds and quantity of necessary inducements (Mano, 1994: p. 18). However, he did not consider
the functions of the organization, such as the process of creation, transformation or exchange of
utilities where Barnard also placed his emphasis (Mano, 1994: p. 26).
23 Turnover Intent
2.4. Turnover Process Models
Several studies were already conducted that focused on developing and estimating a causal
model specifying the factors of voluntary turnover. The common theme which can be observed
from the following described models is that turnover behavior is a multistage process that
includes behavioral, attitudinal, and decisional components (Barak et al., 2001: p. 628). Five
turnover models are presented below, which are chronologically listed. These key models have
shaped the research on turnover behavior and therefore need to be discussed.
2.4.1. March & Simon’s Model
Many studies of voluntary turnover are to some degree descendants of the March and Simon
(1958) framework (e.g. Mobley, 1977/Lee et.al, 1999). Their model can be traced back to
Barnard-Simon’s theory of “organizational equilibrium” where they argued that all employees
confront with decisions through their interaction with the company (Mano, 1994). A special
concern in this study is the “decision to participate” with the key variable “desirability and ease
of movement in and out of the organization” (Bowen&Siehl, 1997: p. 57). The theory specifies
that employees’ decision to resign is influenced by two factors: their “perceived ease of
movement”, which refers to the assessment of perceived alternatives or opportunity and
“perceived desirability of movement”, which is influenced for instance by job satisfaction
(Morrell et al., 2001: p. 34-35). This describes how balance is struck both for the organization
and its employees in terms of inducements, such as pay, and contributions, such as work, which
ensures continued organizational efficiency. When inducements are increased by the company,
this will lower the tendency of the worker to leave and vice versa (Morrell et al., 2001: p. 34).
Many limitations of March and Simon’s model exist. Their model more presents a static rather
than a procedural view of turnover. They also failed to include important variables that influence
the turnover process, such as role stress or different forms of organizational commitment
(Morrell et al., 2001: p. 35). Some theorists asserted, that March and Simon’s model has overly
influenced further studies about employee turnover and that their success may have constrained
other aspects (e.g. Lee and Mitchell, 1999).
24
Turn
over
Inte
nt
Fig
ure
4:
Sim
pli
fied
Ver
sion o
f M
arch
and S
imon
’s M
odel
(Morr
ell
et a
l., 2001:
p. 6
2)
25 Turnover Intent
2.4.2. Mobley’s Model
The employee turnover decision process by Mobley (1977) has shaped the course of turnover
studies for the past decade. He pioneered an extensive explanation for the psychological turnover
process. Mobley’s model is based on several former preceding studies, for instance March and
Simon’s theory (1958) about ease and desirability of work concept and Porter and Steer’s model
(1973) of met-expectation and intent to leave. The model is heuristic rather than descriptive
(Mobley, 1977: p. 239).
A schematic representation of the turnover decision process is illustrated in Figure 5. The
termination decision process can be described as a sequence of cognitive stages starting with the
process of evaluating the existent job followed by the emotional state of satisfaction or
dissatisfaction. One consequence of dissatisfaction is to initiate thought of quitting. The next step
is the evaluation of the expected utility of search (e.g. desirability of possible alternatives travel
or lost work time) and of the cost of quitting (e.g. loss of vested benefits). If perceived possibility
of finding an alternative is available and if the costs are not that high, the next step would be
behavioral intention to search for alternatives followed by an actual search. If alternatives are
existent, then an evaluation of alternatives will proceed. Afterwards a comparison of the present
job to alternatives will follow. If the comparison favors the alternative, then behavioral intention
to quit will be stimulated, followed by the final decision to quit. (Mobley, 1977: p. 237-239)
Other later studies extended Mobley’s model by including other variables, such as
organizational commitment (e.g. Kim et al., 1996) or examined factors that affect job satisfaction
more precisely (e.g., Price&Mueller, 1981).
Mobley’s model features frail on empirical evidence for the conceptual differentiation among his
explanatory constructs (Hom&Griffeth, 1991: p. 350). Subsequent models enhanced Mobley’s
construct. One of the established theoretical alternatives was Hom et al.’s model in 1984
(Hom&Griffeth, 1991). They argued that Mobley’s theory had a lack of empirical evidence for
the conceptual distinction among his explanatory constructs. However, their findings to some
extent showed a similar possible intermediate step in the turnover process, yet a major distinction
exists. Their study resulted that the “Intention to Quit” takes place before an “Intention to
Search”.
26 Turnover Intent
Figure 5: Mobley’s Employee Turnover Decision Process Model
(Mobley, 1977: p. 238)
2.4.3. Sheridan and Abelson’s Model
One established model is called the “cusp-catastrophe” model and has been developed by
Sheridan and Abelson (1983) to explain job turnover of nursing employees. Compared to the
27 Turnover Intent
prior models it offers a more complex illustration of the turnover process (see Figure 6).
Sheridan and Abelson based their work on the mathematical Catastrophe theory, which considers
the dynamic withdrawal process that occurs over time and a discontinuous change from retention
to termination (Morrell et al., 2001: p. 43).
The model has three main characteristics. Firstly, the withdrawal behavior is a discontinuous
variable with abrupt changes, which is characterized with a “delay rule”. According to this, an
employee attempts to retain in employment as long as possible. If the employee feels that he
cannot stay any longer, due to job dissatisfaction or stress, then he will abruptly change from
retention to termination. Secondly, characteristic is the presence of the hysteresis zone of
behavior for some values of the control factors and is being described as the fold in the
behavioral surface. The trace of the fold can be seen on the control surface and is named as the
bifurcation plane. It represents a state of disequilibrium for employees, in which they are about
to change from retention to termination. Thirdly, the divergence of behavior occurs on opposite
sides of the bifurcation plane. As employees approach the bifurcation plane, very small changes
in the control variables, such as job tension or stress, can result in discontinuous changes from
retention to termination. (Sheridan&Abelson, 1983: p. 419-420)
One crucial limitation of this study assumes linear and continuous relationships between the
listed factors and turnover. It fails to reflect the threshold nature of the phenomenon (Morrell et
al., 2001: p. 44). However, Sheridan and Abelson’s model offered two fundamental contributions
to the turnover research. First they recognized the discontinuous dynamic characteristic of
turnover and second because of its provocative divergence from traditional view of the turnover
process it indicates another direction for future research (Morrell et al., 2001: p. 44).
28 Turnover Intent
Figure 6: Sheridan and Abelson’s Cusp-Catastrophe Model
(Sheridan&Abelson, 1983, in Morell et al., 2001: p.63)
29 Turnover Intent
2.4.4. Price and Mueller’s Model
Price and Mueller’s model from 1986 analyzes the causal determinants of turnover (Morrell et
al., 2001). Determinants of voluntary turnover are based on empirical research conducted that
has been since 1972 at the University of Iowa. Compared to March and Simon’s framework this
model offers a comprehensive list of determinants, such as generic factors like job satisfaction.
Turnover is interpreted as the result of a decision process (Morrell et al., 2001: p. 38).
Exogenous variables, which are independent from the states of other variables in the model, are
subdivided into three major groups: Environmental (e.g. Opportunity and kinship
responsibilities), individual (e.g. General training) and structural (e.g. Routinization) groups
(Price, 2001: p. 601). Endogenous variables which values are determined by the states of other
variables in the model (www.personal.umd.umich.edu) are job satisfaction, organizational
commitment and intent to leave. Several unidirectional causal relationships with the dependent
variable turnover are illustrated in Figure 7.
In the meantime, Price and Mueller enhanced their model by adding other exogenous (e.g. social
support) and endogenous (e.g. search behavior) variables in their construct (Price, 2001).
Nevertheless, this model also shows some limitations. There is a lack of fundamental theory of
behavior or action, thus this limits an adequate explanation for the turnover process. The sample
featured a lack of occupational heterogeneity, since they conducted their tests mostly on middle
class jobs, such as nurses or teachers. They also failed to investigate interaction effects regarding
the determinants of turnover (Morrell et al., 2001: p. 38).
30
Turn
over
Inte
nt
Fig
ure
7:
Pri
ce a
nd M
uel
ler’
s C
ausa
l M
odel
(Pri
ce&
Muel
ler,
1986 i
n M
orr
ell
et a
l., 2001:
p. 6
3)
31 Turnover Intent
2.4.5. Lee and Mitchell’s Model
The model by Lee and Mitchell established in 1994 describes different psychological paths that
employees take when leaving organizations. It resulted that many people quit their jobs not only
due to negative affects (e.g. job dissatisfaction), but because of the variety of particular jarring
events, identified as “shocks” (e.g. unsolicited job offer, changes in martial state or firm
mergers). The authors argued that most people follow one of four psychological and behavioral
paths when leaving. Major components (shocks, scripts, image violations, satisfaction and job
search) were used to categorize leavers into one of the four paths (Lee and Mitchell, 1994: p.
451).
Figure 8 depicts the unfolding model’s four theorized paths. Path 1 describes how a shock can
trigger the enactment of a script. This script details a plan of action and can be based on past
experience, observation of the experience of others or social expectations. The employee quits
without considering other job alternatives. Moreover, job satisfaction seems to be irrelevant in
the decision process in path 1. In path 2, a shock initiates an employee to reconsider his
attachment to the organization, since image violations are perceived by the employee. Image
violations occur when an individual's values, goals, and strategies for goal attainment do not fit
with those of the employing organization or those implied by the shock. The person leaves
without searching for other alternatives. In path 3, a shock generates an image violation.
Consequently this induces a person’s evaluation of the current job and several alternatives. In
path 4, the precipitator is job satisfaction. Some employees who experience job dissatisfaction
simply leave without having other alternatives (Path 4a), while other dissatisfied workers quit
only after searching and evaluating other jobs (Path 4b) (Lee&Mitchell, 1999: p. 451-452).
Path 4b represents the turnover process suggested by many theorists. The other paths suggest
processes that have not been discussed in the literature before. The unfolding model is a
“contemporary example of an account which represents a break from the established paradigm”
(Morell, 2001: p. 48). However, this model still features some unexplainable paths, which should
be examined in order to understand the turnover process as a whole.
32
Turn
over
Inte
nt
Fig
ure
8:
Lee
and M
itch
ell’
s U
nfo
ldin
g M
odel
(*)
indic
ates
that
the
route
is
not
clas
sifi
able
and t
hat
it
repre
sents
a t
heo
ry f
alsi
fica
tion—
a w
ay i
n w
hic
h a
n i
ndiv
idual
could
lea
ve
an
org
aniz
atio
n t
hat
would
not
be
par
t of
one
of
the
model
's p
aths
(Lee
and M
itch
ell,
1999:
p. 451)
33 Turnover Intent
2.4.6. Conclusion
After discussing five established models, there is an indication that none of the described models
offered an adequate explanation for the turnover process. It has to be emphasized that due to the
high complexity of the concept a general turnover process model still not exists. In spite of
extensive studies on turnover in organization, there is yet no universally acknowledged
framework for understanding why employees choose to leave (Lee and Mitchell, 1999).
Although there is no standard model for understanding voluntary turnover process as a whole, a
wide range of variables have been found useful when it comes to interpreting employee turnover.
Therefore understanding the reasons for turnover intent can be also explained by outlining the
impact of various factors, which are discussed in the following chapter.
34 Turnover Intent
3. Factors that have an Impact on Turnover Intent
Voluntary turnover is a complex process that includes several elements, which are illustrated in
Figure 9. It is classified in three major causes. Firstly, price and convenience of the withdrawal
plays an important role for employee turnover and separates social from financial aspects. The
financial aspect may take many forms, such as wage, fringe benefits and other commodities that
have financial value which organizations give to employees in return for their service. The social
aspect refers to the social behavior of an employee within his organization, such as integration or
relationship with other associates. Low perceived financial and social aspects in the own
organization can lead to turnover. Secondly, the intensity of desire for withdrawal has an impact
on turnover. Job satisfaction and job insecurity can be placed in this field. If an employee is
dissatisfied or insecure with his job, then intensity of desire for withdrawal will be higher.
(www.hrm.unizh.ch)
Figure 9: A General Illustration of Turnover
35 Turnover Intent
Last but not least, the attractiveness and availability of alternatives can influence employee
turnovers. External factors, such as labor market or personal living circumstances, play decisive
roles in the turnover process. This paper would like to address the issue of the specific impact of
the determinants in the following chapter.
3.1. Determinants
The focus of this chapter would be to identify determinants causing turnover and to deduce
hypothetical direction of action. Several variables will be categorized into three different groups;
psychological, economic and demographical variables. This paper takes in account that some
determinants may be interest of multiple categories. However, the purpose of the classification of
the determinants into a category is to give a general view. According to Price (2001), economists
and psychologists, who were predominantly involved in the turnover research, focused their
interest on different variables. Psychological accounts emphasized the role of individual choice,
whereas economic views are focused on the formative role of external influences such as
external opportunities (Morrell et al., 2001). Nevertheless, this study adjusted the table with
further factors, due to their relevance in the turnover process. Potential determinants, which are
also captured in our data set HR Barometer 2007, are listed in Table 4.
Table 4: Determinants for Voluntary Turnover Subdivided into Categories
Psychological Determinants Economic Determinants Demographic Determinants
� Psychological Contract
� Job Satisfaction
� Organizational
Commitment
� Job Insecurity
� Pay
� External Opportunity
� Training
� Company Size
� Age
� Tenure
36 Turnover Intent
3.1.1. Psychological determinants
Psychological determinants refer to the employee’s mental process and behavior, such as
expectations, orientation, job satisfaction, organizational commitment, job involvement or
affectivity. Conceptualizing turnover psychologically deals with factors that are influenced by
employee’s emotions, attitude or perception (Mueller&Price, 1990: p. 322). The psychological
school about turnover process concentrates more on the decision dimension to turnover. Some
perspectives of the economist appear in the psychological model, but are usually conceptualized
in other terms. For instance, while pay is one major dimension in the economic school,
psychologists stress individual variations in expectations about pay, such as distributed justice or
pay satisfaction.
In contrast to economic dimensions, psychological view enables the effective management of
turnover by offering potential on focusing their efforts on a key group of employees, or even on a
single employee (Morrell et al., 2001: p. 32). The psychological school of turnover may be
“classed as voluntary, as they emphasize the role of individual choice, whereas economic
accounts are more typically determinist, as they emphasize the formative role of external
influences such as alternative opportunities”(Morrell et al., 2001: p. 32). However, the
psychological school often includes only those dimensions related to work issues and thus they
neglect considering non-work factors as reasons for leaving work (Lee et al., 1996). Psychological
determinants are listed below.
Psychological Contract
A psychological contract refers to “an individual’s beliefs regarding the terms and conditions of
a reciprocal exchange agreement between that person and another party” (Rousseau, 1989 in
Farmer&Fedor, 1999: p. 350). The concept of the psychological contract is based on the insight,
that the employees’ motivation and the level of their performance have to be maintained by the
organization through incentives and rewards (Brinkmann&Stapf, 2005: p. 21-22). This give and
take relation between organization and the employees is a complicated process about exchange
and adjustment, and is made up of manifold and reciprocal expectations. The psychological
contract contains all reciprocal yet unexpressed expectation, hopes and wishes of employees or
37 Turnover Intent
employers and is a not formulated supplementary agreement next to the lawful binding work
contract. Some bipartisan matters concerning the psychological contract are listed in Table 5.
Each lopsided accomplishment leads to disequilibrium of the psychological contract.
Lopsidedness occurs when the company considers the employee only under the aspect of the
organizational purpose and solely fulfills the obligation on the formal contract, such as wage
payment. It signifies a negligence and contempt of individual motives of the employees and
leads to insufficient dedication. Employees then tend to level their interest only on their wages. If
the fulfillment of employee’s expectations, wishes and hopes fail to appear in the long run and
the disadvantages are not equilibrate by advantages, then the employee’s inner conflict will get
worse. If an employee is not able to bring about any changes, then work dissatisfaction will
occur and then he will feel the break of the psychological contract. (Brinkmann&Stapf, 2005: p.
23)
Table 5: Bipartisan Expectations
Employee � Comfortable and satisfying working conditions
� Possibility on exerting an influence on organizational matters
� Proper care, encouragement and support by the employer
� Protection from being overstrained and not being challenged
� Establish job safety
Employer � Classification and subordination of the employee under existing
structures
� Unconditional loyalty
� Unrestricted worker’s availability
(Brinkmann&Stapf, 2005: p. 22-23)
38 Turnover Intent
The foundation of the psychological contract is based on the social exchange theory, which
assumes that the human behavior is controlled by individual utility maximization
(Brinkmann&Stapf, 2005: p. 24). Humans strive to maximize benefits and minimize costs.
Contract violations can trigger negative responses, such as lower the employee’s contributions,
reduced satisfaction or turnover intentions (Farmer&Fedor, 1999: p. 352).
H1: If the employee perceives the psychological contract as broken, then turnover intent will be
higher.
Job Satisfaction
“Job satisfaction is the pleasurable emotional state resulting from the appraisal of one's job as
achieving or facilitating the achievement of one's job values” (Locke, 1969: p. 316). Job
satisfaction was conceived to be one’s affective attachment to the job viewed either in its entirety
(global satisfaction) or with regard to particular aspects such as leadership. It is conceptualized
as an affective and emotional response. Satisfaction is defined as the degree to which employees
have a positive affective orientation towards employment by the organization (Price, 1977: p.
79). Negative affective orientation towards the organization will emerge when employees are
dissatisfied. The conformity, predictability and compatibility components of job satisfaction
rather refer to the psychological school (Morrell et al., 2001: p. 34). Many studies showed
empirical evidence that job satisfaction is an important predictor of future mobility (e.g. Mobley,
1977; Hom&Griffeth, 1991).
H2: Job satisfaction decreases turnover intent.
Job satisfaction is a complex construct composed of several facets which influence the
employee’s mind. The literature commonly distinguishes various dimensions of satisfaction. It
should be emphasized that this study views satisfaction not only as global emotional state, but
also as a product of different determinants which are sampled in the given data set HR-
Barometer 2007.
39 Turnover Intent
Autonomy
Autonomy is the quality or state of being self-governing. In this study the term “autonomy” is
used to refer to jobs rather than to organization and refers to the control over work activities.
Work autonomy is defined as “the amount of discretion that an employee has in carrying out his
work activities” (Price, 1997: p. 456). Interdependence and work autonomy are often confused in
studies. The degree to which a worker depends on group members in performing his job must be
differentiate from the amount of power that an employee has relative to his job (Price 1997: p.
455). This study hypothesizes:
H2a: Autonomy has a positive impact on job satisfaction.
Pay satisfaction
According to Lawler, “pay satisfaction or dissatisfaction is a function of the discrepancy between
what one feels one should receive and how much pay one does receive” (Lum et al., 1998: p.
307). Several studies included pay satisfaction as a component of a multi-dimensional measure
of job satisfaction (e.g. Frisina et al, 1988). Pay satisfaction causes include personal and job
inputs, monetary and nonmonetary outcomes, the comparison process, as well as pay policies
and administration. Models of pay satisfaction are based on the concept of Equity theory (Lum et
al., 1988: p. 307) which emphasizes that pay satisfaction is caused by sentiments regarding the
equity of a person’s pay. These sentiments are influenced by the perceptual and comparative
processes of the income/outcome ratio compared with a referent source, such as an associate. If
the ratio is consistent with the other referent source, then pay satisfaction results. Inequitably
feeling exists when someone’s pay is perceived to be less than another’s. Consequences of pay
dissatisfaction contain several unwanted employee behaviors, such as turnover, absenteeism or
lowered job performance. Pay satisfaction was examined to be negatively correlated with
turnover intent, since it was positively correlated with job satisfaction (Lum et al, 1998: p. 308).
H2b: Pay satisfaction has a positive impact on job satisfaction.
Participation
Employees should be able to have an influence over the decisions within the company. If
decisions affect the staff, then employees are likely to view participation in order to obtain more
40 Turnover Intent
favorable decision outcomes. Compared to unfavorable decision outcomes without employee’s
possibility to participate can create negative attitudes towards those, who were responsible for
the outcomes (Magner, 1996). Participation can also be related to power particularly to
centralization, which is “the degree to which power is differently distributed within the
organization” (Price, 1997: p. 449). Thus the more power is distributed, the higher is the
decentralization. One of the benefits of Participatory Management is that employees will be more
contented, since they feel needed and wanted (Marrow, 1967). Therefore participation in
organizational decision making or concerning an employee’s own work setting should have a
positive impact on job satisfaction.
H2c: Participation has positive impact on job satisfaction.
Work flexibility
Work flexibility negotiates with employee conditions involving adjustments in the timing, scope
and/or place of work (Goldenhar, 2003). Two major characteristics are often discussed in studies
(e.g. Hill et al., 2001). One is the so called “Flextime”, where employees have the possibility to
choose their starting and ending hours. The other is “Flexplace”, where workers are able to do
their work at a location by choice other than the regular workplace, such as the employee’s home
(Goldenhar, 2003: p.3). In Hill et al.’s paper (2001: p. 49) they argued that individuals better
manage long work hours with unpredictable work loading, when they have the control over when
and where to work. Benefits of work flexibility can be also seen in the level of employee’s job
satisfaction.
H2d: Work flexibility enhances job satisfaction.
Job design
Job design is defined as “the organization of tasks and the structuring of jobs in a way that
provides satisfaction for job holders and increases their effectiveness” (www.gov.je). It
compromises the specification of a work system related to a job and includes activities of job
enrichment, job enlargement and job rotation. Several studies investigated job satisfaction as
worker response to job design (e.g. Anderson, 1984)
H2e: Job design increases job satisfaction.
41 Turnover Intent
Supervisory Support
The relationship of supervisor support, also referred to as leadership, and job satisfaction is a
paramount concern of several studies. A leader has to provide support or show consideration for
employees concerning, otherwise a negative leader-employee interactions can result in lower
pleasure with work, reduced productivity and motivation or absenteeism (Ribelin, 2003). Studies
(e.g. Mobley et al., 1979) discussed the important role of the immediate supervisor in a turnover
process. Supervisory support lowers turnover intent through its positive impact on job
satisfaction (Price, 2001).
H2f: Supervisory support has a positive influence on job satisfaction.
Organizational Commitment
Mowday and Steers defined commitment “as the relative strength of an individual’s
identification with and involvement in a particular organization” (1979, p. 226). It is
characterized by three factors:
� a strong belief in and an acceptance of the organization’s goals and values
� willingness to exert considerable effort on behalf of the organization
� and a strong desire to maintain membership in the organization
Commitment can be seen as the loyalty to a social unit, such as organization, the subsystem of an
organization or an occupation (Price, 1997: p. 335). Most research on commitment concentrates
on organizations rather than subsystems or occupation. Organizational commitment refers to the
employees’ psychological attachment to the organization. Meyer and Allen conceptualized
commitment in terms of three distinct psychological states which influence whether the
employees remain or leave the organization (Lee et al., 2001: p. 597):
� affective commitment: emotional attachment to the organization
� continuance commitment: recognition of the cost associated with leaving the organization
� normative commitment: perceived obligation to remain with the organization
42 Turnover Intent
Most of the studies argued that affective commitment emerged as the most consistent precursor
of turnover intent (e.g. Sommers 1995). Yet it should be noticed that an employee can be
simultaneously affectively, continuously and normatively committed to the organization. Some
traditional studies argued that organizational commitment develops from job satisfaction (e.g.
Price&Mueller, 1981) and concluded that commitment takes longer to develop and thus is more
stable than job satisfaction. However, recent studies (e.g. Currivan, 1999) showed that no
significant relationship between organizational commitment and job satisfaction exists.
H3: Organizational Commitment lowers the turnover intent.
Job Insecurity
Hesselink et al. defined job insecurity as a “personal concern about the continuity of the job”
(Hesselink et al., 1999: p. 275). Employees can feel insecure even though no reasons for it exist.
However, job insecurity is more known concerning the future-uncertainty about a future job
development and its possible discontinuity. Hesselink et al. (1999) argued that there are two
dimensions that can cause job insecurity: the perceived probability and the perceived severity.
They stated that “the more likely it is that a person will lose his or her job and/or the more severe
the consequences of the loss are, the stronger his or her feelings of job insecurity will be”
(Hesselink et al., 1999: p. 275). Job insecurity resulted to be related to decreased work effort,
resistance to change and intention to job mobility, hence adversely impact organizational
effectiveness (Greenhalgh & Rosenblatt, 1984). The positive correlation between job insecurity
and turnover intent is to be expected. Individuals who worried about continuity of employment
are likely to seek more secure jobs.
H4: Job Insecurity increases turnover intent.
3.1.2. Economic determinants
Economists view the employee’s decision, whether he wants to leave or stay, as a result of a
rational cost-benefit assessment (Mueller&Price, 1990: p. 321). When rewards to costs ratio of
staying with an organization are equal to the ratio at another place of employment, the employee
will decide not to leave the current organization. Economic view analyzes the turnover process
with more emphasis on the interplay between externally determined variables such as pay or
43 Turnover Intent
opportunity (Morrell et al., 2001: p. 21). However, a criticism of the sole economic perspective
might be that it fails to “capture the complexity of the process of turnover within an individual
firm” (Morrell et al., 2001: p. 33). Simply economic analysis of turnover may also create
solutions that are inoperable. For instance, the firm may be not able to modify pay or influence
the labor market factors (Morell et al., 2001: p. 33). This study will discuss some important
economic variables, which are illustrated in the data set.
Pay
Pay is one major component for economists. The dominant proposition which is subject to the
economic model is that high pay in their present employment will reduce turnover. According to
Mueller and Price (1990: p. 321), pay is considered as a part of the sanctions system used by the
organization to motivate employees to be in compliance with its regulations and rules. The wage
payment plays an important role in their current as well as in possible future employment. The
lower the salary is in his existent organization, the more an employer will aim to change this
situation. Furthermore it is to assume, that better paid employees within the same hierarchy level
tend to stay in the organization (Henneberger&Sousa-Poza, 2007: p. 61).
However, there are well-established literatures concerning motivation (e.g. McGregor 1957)
suggesting that for at least some individuals, pay is not the sole motivating factor. It is told that
motivation has some link with job choice and that pay will not be the sole criterion used when
people decide to choose a job, or when they decide to continue within an existing job.
H5: High pay has no significant effect on turnover intent behavior.
External Opportunity
External Opportunity refers to the availability of alternative, attractiveness and attainability of
employment in the environment. The interaction of supply and demand forces in the economy
must be taken into consideration in measuring external opportunity. The availability is mainly
about the number of opportunities outside the organization. The attractiveness refers to the pay
levels of such opportunities. Last but not least, attainability is defined by the possession of the
skills required on the job (Mueller&Price, 1990: p. 321). Thus numerous higher paid jobs for
which a worker is qualified should produce a greater turnover.
44 Turnover Intent
H6: High perceived external opportunity produce greater turnover intent.
Training
The training dimension is relevant for the turnover process and is related to pay and job market
components. Many employees increase their productivity by adding new skills to their
knowledge and perfecting old ones while on the job (Forrier&Sels, 2003: p. 151). Thus the
relationship between training and turnover intent can be traced back to the Human Capital
theory, arguing that the investment on training can increase the quality of an employee (Becker,
1993). This study did not consider distinguishing between the two different types of training,
such as general or specific training. However, the amount of training days can indicate the effort
of the company to invest in their employees with the intentions to retain them. Therefore this
study hypothesizes:
H7: High amount on training will reduce turnover intent.
Company Size
During the recession phase in the mid-nineties, smaller organizations were confronted with
higher turnover rate, whereas bigger organizations were able to keep their employees
(Henneberger&Sousa-Poza, 2002: p. 17). Many people assume that bigger companies pay a
higher salary, have more existing promotion opportunity (internal vertical and horizontal
mobility) and offer a higher job safety than smaller companies (Henneberger Sousa-Poza, 2002:
p. 17). Therefore an inverse relationship between company size and turnover intent exist
H8: Bigger companies feature lower turnover intent.
3.1.3. Demographic determinants
Demographic variables, also known as personal characteristics, are widely used in turnover
research. These variables are seen as social categories for an individual (Price, 1995). Two
determinants were examined to have a direct impact on turnover intent, such as tenure and age.
45 Turnover Intent
Tenure
Many studies included tenure in demographical predictors of turnover (e.g. Cotton and Tuttle,
1986/ Price, 1977/ Hom&Griffeth, 1991). These studies discussed the relationship of turnover
and tenure. Tenure reflects specific human capital investments, learning about job characteristics
that can modify the position’s attractiveness, as well as periodic labor force attachments
(Viscusi, 1980: p. 394). Individuals with a higher rate of length of service, who leave the
organization, are likely to be found disproportionately from among the members with low
lengths of service. Increased tenure shows to be strongly related to propensity to remain.
H9: If the amount of tenure is high, then turnover intent will be low.
Age
The factor age has been resulted to be negatively correlated with the probability of job turnover
intent (e.g. Henneberger&Souza-Poza, 2007). Based on the matching theory, younger people
have an experimental stage at the beginning of their professional life. A change is less attractive,
since the available time to redeem the costs associated with a job turnover diminishes with age.
H10: Turnover intent decreases with increasing age.
3.2. Moderators
After having listed various important determinants in the former chapter, it is now important to
propose the effects of moderators in the turnover process. According to Baron and Kenny, a
moderator is defined as “a qualitative (e.g., sex, race, class) or quantitative (e.g. level of reward)
variable that affects the direction and/or strength of the relation between an independent or
predictor variable and a dependent or criterion variable” (Baron&Kenny, 1986: p. 1174). The
two presented moderators, gender and education, are categorized as demographic variables (e.g.
Price, 1995). Studies revealed their effects as moderators in the turnover process (e.g. Royalty,
1998).
46 Turnover Intent
3.2.1. Gender
Various studies examined the effect of gender on job mobility. The central question was if
women have a weaker attachment to their job and to the labor market than men. Since most of
the studies showed no apparent difference in job mobility by gender, searching for the main
effect of gender on turnover intent is senseless. A traditional view associated women with
childbearing or with secondary earners in the household (e.g. Royalty, 1998). These historical
views have had more reasons for leaving the job than men (e.g. follow a spouse’s career moves).
Therefore it can be assumed that the relationship between organizational commitment and
turnover intent is moderated by gender. Thus this study hypothesizes:
H11: Organizational commitment will have more impact on male turnover intent than on female
turnover intent.
It has been investigated that differences exist concerning job satisfaction and gender. One may
assume that women tend to be more satisfied than men (Souza-Poza, 2007: p. 896). Different
social-psychological studies (e.g. Crosby, 1982; Mueller&Wallance, 1996) show organizational
and job satisfaction to be equal between women and men. Economic studies however (e.g. Clark,
1997; Souza-Poza, 2007) concluded that due to the lower expectations of women about their
careers, they seem to have a higher job satisfaction on identical jobs than men, which generally
reduces job turnover inclination.
H12: The job satisfaction-turnover intent is stronger for female employees.
3.2.2. Education
Education is an important variable in Human Capital theory, which proclaimed that education is
an investment in human capital (Becker, 1993). It showed that productivity gains with education.
It is often assumed that the level of education has a positive effect on the probability of job
mobility since a high education is often associated with better labor-market alternatives (e.g.,
Royalty, 1998). However, most examinations did not reveal a significant direct impact on
turnover intent (e.g. Campbell, 1997).
47 Turnover Intent
Based on the Matching theory, Henneberger and Sousa-Poza (2002: p. 28) argued that younger
employees tend to change their employment more often, since they are experiencing an
experimental phase at the beginning of their professional life. Since high educated employees
supposedly have better labor market alternatives (e.g. Royalty, 1998), this study hypothesize the
following.
H13: Younger high educated employees tend to have a higher turnover.
Royalty examined turnover by gender and educational level (1998). She found out that
differences in gender turnover are due to the behavior of less educated women. Less educated
women vary significantly in their turnover behavior from both groups of men and from more
highly educated women. Women with higher education do not significantly differ from less or
more educated men in their turnover behavior.
H14: Less educated women are more likely to have higher turnover intent then men.
48 Turnover Intent
4. Methodology
4.1. Procedure
For the evaluation of the listed impacts of determinants and moderators on turnover intent, an
empirical analysis is needed. The yearly survey HR-Barometer 2007 will provide the data set for
this study. At first, a small description about the data set will be given, followed by an overview
about the participants as well as their turnover intent in the survey. Factors that have an impact
on turnover intent will then be analyzed with regression models and analysis of variance.
4.2. Data set: “HR-Barometer 2007”
The determinants chosen to include into study were selected from those available in the data base
“HR-Barometer 2007”. To evaluate the contentions mentioned in chapter 3, it is important to
have a data set that is more focused on the “Human Side of Enterprise”. HR-Barometer is a
survey made by the University and ETH Zurich. It is an annual repeated sampling about the
labor situation of employees in Switzerland and measures the current “business temperature”.
The detailed and statistical analysis revealed current trends in Human Resource Management as
well as important effects on employees and organizations. Based on the results of this data set,
different decision guidance and proposals can be deduced and it allows comprehending the
change management. This established instrument will be taken over for this study.
The data set is based on telephone surveys conducted in Switzerland. Names and telephone
numbers, which were randomly selected, were provided from the Swiss Federal Statistical
Office. The questionnaire is composed of closed questions with predetermined response options.
People between 16 and 65 years old, who were at that time forty percent or more employed, were
allowed to participate. Respondents were neither self-employed nor proprietor of a business.
Surveying by telephone is recommended when your desired sample consists of the general
population. The scope of reach possible with telephone surveys is vast.
4.3. Participants
Participants were inhabitants of Switzerland. In total, 1366 people participated, whereas 1007 of
them from the German-speaking and 363 from the French-speaking part of Switzerland. Their
49 Turnover Intent
mean age was 44.26 years (sd= 10.30) and their average tenure was 10.24 years (sd = 9.35). The
distribution of the participants’ sex was almost equal, that is 55 % male and 45% female. The
share of University or college of higher education graduates represents approximately 34%, and
61% was the share of apprenticeship, vocational school and Matura. 14% of the participants
work in a micro business, 48% in SME and 38% in a large-scale enterprise. 64% of the
participants had an employment without supervisor function. It also showed a representative
distribution by industry.
Figure 10 depicts that about 30% of the respondents were rather likely or even very likely to
have intentions to leave. Disaggregated by industry, it shows that health and social care features
the highest amount on turnover intent, whereas agriculture and forestry industry have the lowest
(see Figure 11).
Figure 10: Turnover Intent Response-HR Barometer 2007
50 Turnover Intent
Figure 11: Turnover Intent by Industry HR-Barometer 2007
51 Turnover Intent
5. Results
In this section we discuss whether our listed hypotheses were supported by the survey data.
Regression analyses were separately conducted for psychological, economic and demographic
determinants. Significant coefficients were then integrated in one model to see whether
determinants change their significance. In this study moderation of the form of a relationship is
detected by looking for interaction effects in analyses of variance (ANOVA) or significant
regression coefficients for interaction terms.
5.1. Statistical Analysis
To characterize the degree of linear relationship between the formulated determinants and
turnover intent, it is important to understand the different dimensions of the regression model.
The goodness of fit of the regression model can be measured with the multiple correlation
coefficient (R2). Therefore an R
2 of 1.0 (100%) indicates a perfect fit. It describes the overall
proportion of variance in the criterion that can be explained by the linear regression equation.
Statistical significance is tested with the F-test for the overall fit, followed by the t-test and the p-
values for individual parameters’ significances. Beta coefficients show absolute change of
dependent variable weight if dependent variable size changes one unit. The standardized
regression coefficients allow comparing the strength of each predictor. Their relative absolute
magnitudes reflect their relative importance in predicting weight. The level of statistical
significance is being applied at α=5%.
5.1.1. Psychological Determinants of Turnover intent
A linear regression analysis provides an understanding for the relationship between the different
psychological determinants and turnover intent. The regression equation is:
Turnover intent= α + β1*Psychological Contract + β2*Job satisfaction + β3*Organizational
Commitment + β4* Job insecurity
Table 6 shows the results of the regression analysis for the effect of psychological determinants
and turnover intent. The overall fit was significant. All variables showed highly significant
effects on turnover intent. Each of the predicted variables had highly significant (p < 0.001)
52 Turnover Intent
impacts on turnover intent. Job satisfaction indicates the highest impact followed by
Organizational Commitment, Job Insecurity and Psychological contract. The regression analysis
supported H1, H2, H3 and H4. The R² shows an acceptable fit of the model.
Table 6: Regression Psychological Determinants of Turnover Intent
Coefficients
(β)
Std.
Error
Standardized
Coefficients t-Value p-Value
Constant 3.284 0.137 23.908 0.000
Psychological Contract -0.139 0.036 -0.103 -3.831 0.000
Job Satisfaction -0.150 0.015 -0.286 -9.911 0.000
Organizational Commitment -0.149 0.023 -0.176 -6.443 0.000
Job Insecurity 0.098 0.023 0.107 4.270 0.000
Coefficient of Determination R²=.260
Since Job Satisfaction showed the highest β-coefficient, it is therefore interesting to examine
which determinants have an impact on job satisfaction. It has to be emphasized that the
regression equation of Job Satisfaction is adapted from HR-Barometer 2007.
Job Satisfaction = α + β1*Autonomy + β2*Pay Satisfaction + β3*Participation + β4* Work
flexibility+ β5*Job Design
Table 7 shows the results of the regression analysis for the effect of the different independent
variables on job satisfaction. The overall fit was significant. All variables showed highly
significant effects on job satisfaction. Each of the predicted variables had highly significant
impacts on job satisfaction (p ≤ 0.001). According to the regression model, job design showed
the highest effect on job satisfaction, closely followed by pay satisfaction, and then autonomy
and supervisor support. The hypotheses H2a, H2b, H2c, H2e and H2f are accepted. Work
flexibility resulted unexpected results. Even though, a bivariate correlation test revealed a
positive correlation between work flexibility and job satisfaction, it indicated a negative
53 Turnover Intent
relationship with job satisfaction in the regression model, β= -0.086, t=-3.649, p<0.001.
Therefore hypothesis H2d is rejected. The R² shows an acceptable fit of the model.
Table 7: Regression Determinants of Job Satisfaction
Variables
Coefficients
(β)
Std.
Error
Standardized
Coefficients t-Value p-Value
Constant 1.134 0.250 4.531 0.000
Autonomy 0.053 0.012 0.116 4.457 0.000
Pay Satisfaction 0.556 0.055 0.252 10.044 0.000
Participation 0.220 0.063 0.097 3.486 0.001
Work Flexibility -0.147 0.040 -0.086 -3.649 0.000
Job Design 0.803 0.071 0.293 11.359 0.000
Supervisory Support 0.044 0.012 0.093 3.776 0.000
Coefficient of Determination R²=.334
5.1.2. Economic Determinants of Turnover intent
The regression equation with economic determinants as independent variables and turnover
intent as dependent variable is written below.
Turnover intent= α + β1*Pay + β2*External Opportunities + β3*Training + β4* Company Size
Table 8 features the results of the regression analysis for the effect of economic determinants and
turnover intent. The overall fit was significant. In contrast to psychological determinants not all
predicted variables showed significant impacts on turnover intent. As expected pay, had no
significant effect on turnover intent, β=-0.022, t=-1.18, p=0.238. It supported the hypothesis H5.
The determinants “External opportunities” and “Training was significantly related with turnover
intent and also supported the hypotheses H6 and H7. The hypothesis H8 was rejected, showing
that company size is positively and not negatively related to turnover intent. However, the R²
indicated a poor fit of the model, which makes the results ominous.
54 Turnover Intent
Table 8: Regression Economic Determinants of Turnover Intent
Variables
Coefficients
(β)
Std.
Error
Standardized
Coefficients t-Value p-Value
Constant 1.747 0.109 15.175 0.000
Pay -0.022 0.019 -0.034 -1.180 0.238
External Opportunities 0.024 0.007 0.089 3.207 0.001
Training -0.007 0.002 -0.088 -3.176 0.002
Company Size 0.048 0.023 0.060 2.129 0.033
Coefficient of Determination R²=.017
5.1.3. Demographic Determinants of Turnover intent
The regression equation of demographic determinants consists of two independent variables:
Turnover intent= α + β1*Tenure+ β2*Age
Table 9 shows that both tenure and age had significant impacts on turnover intent. The overall fit
was significant. Tenure was significant β=-.009, t=-2.955, p=.003, whereas age was highly
significant, β=-0.011, t=-4.149, p>0.001. The analysis supported the hypotheses H9 and H10.
However, it also revealed a low R², which indicated a poor fit of the model.
Table 9: Regression Demographical Determinants of Turnover Intent
Variables
Coefficients
(β)
Std.
Error
Standardized
Coefficients t-Value p-Value
Constant 2.485 0.106 23.391 0.000
Tenure -0.009 0.003 -0.092 -2.955 0.003
Age -0.011 0.003 -0.129 -4.149 0.000
Coefficient of Determination R²=.037
55 Turnover Intent
5.1.4. Integrated Model of Turnover
So far psychological, economical and demographical determinants were examined separately.
After testing the significance of various listed determinants on turnover intent it is also important
to know how relation can vary when integrating all determinants in one model. It should be
emphasized that only significant determinants are included in the regression equation.
Turnover intent = α + β1*Psychological Contract + β2*Job satisfaction + β3*Organizational
Commitment + β4* Job insecurity + β5*External Environment + β6*Training + β7*Company Size
+ β8* Tenure+ β9*Age
Table 10 features the results for the integrated model. The overall fit was significant.
Psychological determinants remained highly significant (p < 0.001), supporting the hypotheses
H1, H2, H3 and H4. Furthermore, job satisfaction resulted to have the highest impact on turnover
intent. Economic determinants changed their significance. External opportunities became highly
significant and supported the hypothesis H6. Training and company size lost significance,
therefore in an integrated model H7 and H8 has been rejected. The demographic determinant
tenure hypothesis H9 was rejected and age went from highly to significant and still supported
H10. The R² shows an acceptable fit of the model.
Table 10: Regression Integrated Model of Turnover Intent
Variables
Coefficients
(β)
Std.
Error
Standardized
Coefficients t-Value p-Value
Constant 3.317 0.214 15.493 0.000
Psychological Contract -0.155 0.036 -0.114 -4.260 0.000
Job Satisfaction -0.148 0.015 -0.283 -9.764 0.000
Organizational Commitment -0.141 0.024 -0.169 -5.980 0.000
Job Insecurity 0.106 0.023 0.115 4.538 0.000
External Opportunities 0.026 0.007 0.099 3.675 0.000
Training -0.004 0.002 -0.044 -1.884 0.060
Company Size -0.007 0.019 -0.009 -0.361 0.718
Tenure -0.003 0.003 -0.030 -1.048 0.295
Age -0.007 0.002 -0.082 -2.842 0.005
Coefficient of Determination R²=.295
56 Turnover Intent
5.1.5. Moderators
The statistical analysis needs to examine the differential effect of the independent variable on the
dependent variable as a function of the moderator. For appropriately measuring and examining
the moderating hypotheses we have to consider specific analysis procedures.
To examine the significance of the moderator variables, we need to look for interaction effects.
This can be measured with a regression analysis or ANOVA (Baron&Kenny, 1986). The proper
statistical test depends on the nature of the variables. The product term needs to be significant in
the regression equation or in the ANOVA model in order to interpret if an interaction effect
exists.
A 2 X 2 ANOVA revealed a main effect of Organizational commitment on turnover intent,
which was highly significant; F (26.1326) = 9.937, p < 0.001. It did not indicate a significant
main effect of Gender; F (1.1326) =.458, p=.499. In addition, the interaction Organizational
Commitment X Gender was also not significant, F (12.1326) = 1.650, p=0.072. The hypothesis
H11 was rejected. However, the illustration of this relationship (see Figure 12) showed some
outliners, which could have influence the deteriorating results. This issue need to be address in a
future study.
Figure 12: Gender Effect on the Relationship between Commitment and Turnover intent
57 Turnover Intent
A 2 X 2 ANOVA revealed a main effect of job satisfaction on Turnover Intent, which was highly
significant; F (10.1345) = 37.368, p < 0.001. It did not indicate a significant main effect of
gender F (1.1345) =1.572, p=0.210. The interaction Job Satisfaction X Gender was not
significant either F (9.1345) =.885, p=0.538. Thus it rejected the hypothesis H12.
Figure 13: Gender Effect on the Relationship between Job Satisfaction and Turnover intent
A regression analysis was used to test the hypotheses, since both variables are implemented in
ordinal measurement. The overall fit of the model was significant. Table 11 shows the detailed
analysis. The product term Age X Education was not significant, β= -0.002, t=1.167, p=0.244
and therefore rejected the hypothesis H13. However, it also revealed a low R², which indicated a
poor fit of the model.
58 Turnover Intent
Table 11: Regression Moderator Education-Age-Turnover Intent
Variables
Coefficients
(β)
Std.
Error
Standardized
Coefficients t-Value p-Value
Constant 2.651 0.231 11.457 0.000
Age -0.020 0.005 -0.236 -3.930 0.000
Education -0.029 0.063 -0.055 -0.465 0.642
Age*Education -0.002 -0.001 0.150 1.167 0.244
Coefficient of Determination R²=.038
A 2 X 2 ANOVA revealed a main effect of Education on Turnover Intent, which was significant;
F (5.1351) = 2.908, p=.013. It did not result a significant main effect of Gender F(1.1351) =.356,
p=.551. The interaction Education X Gender was also not significant, F (5.1351) = 0.535,
p=0.750. The hypothesis H14 was rejected.
Figure 14: Moderator Education-Gender-Turnover Intent
59 Turnover Intent
5.2. Discussion
The current study was designed to examine several factors that have an impact on turnover intent
using different statistical methods, such as linear regression or ANOVA. The analysis showed
interesting results, drawing a conclusion about the relative importance of psychological,
economic and demographic determinants as well as the moderating variables.
The psychological model indicated that the included determinants had a high impact on turnover
intent. The psychological contract showed that the more an employee perceives his contract as
being fulfilled, the less he would intend to leave. The results support the idea that a
psychological contract is important in the turnover behavior. Psychological contracts are based
on trust. Thus, if contract expectations are violated, trust and faith in the relationship are broken,
consequently the employee’s inner conflict will get bigger and turnover intent will occur. Job
satisfaction displayed the highest relationship, which confirmed early studies (e.g. Mobley, 1977;
Henneberger&Sousa-Poza, 2007), arguing that dissatisfied employees with their work are most
likely to leave. The sum-of-facets measures of job satisfaction were analyzed in a separate
model, indicating that all included factors were all significant. According to the findings, job
design seems to have the highest relationship with job satisfaction. Supervisory support and
autonomy showed the weakest correlations. However, the factor “work flexibility” surprisingly
revealed to have a negative impact on job satisfaction in the regression model, although it
resulted to have a positive correlation with job satisfaction. This contradiction needs to be
examined. Concerns about the equivalence of global and sum-of-facets measures of overall
satisfaction have been raised. Sum-of-facets measures can miss important factors of overall
satisfaction out, that is considered implicitly by global measures or include satisfaction facets
that are irrelevant to a person (Tett&Meyer, 1993: p. 263). Since the variables in the model are
based on the dataset HR Barometer 2007, it is possible that some other important components of
job satisfaction are not included. The negative relationship between organizational commitment
and turnover intent was also confirmed in this study. It appears that the more an employee feels
committed to the organization, the less he intends to leave. It has to be emphasized that the items
in the survey regarding organizational commitment reflect more affective commitment rather
than continuance or normative commitment. Job insecurity resulted to have a positive
60 Turnover Intent
relationship to turnover intent. It supported the hypothesis that the more job insecurity an
employee perceives, the more he would intend to quit.
The economic model revealed the expected results. One important concern of economics school
was pay. The results of the analysis confirmed the hypothesis that pay plays no important role in
the turnover decision process. It emphasized once more that nowadays employees rather prefer
jobs with an interesting job design than high wages. External opportunities had a positive effect
on turnover intent. The more employees perceive their alternatives outside the organization to be
high the more likely the intent to leave. A greater employee awareness of alternative jobs in the
environment allows them to evaluate their current jobs (Mueller&Price, 1990). A high
investment in training resulted to have a negative impact on turnover intent. Turnover intent
decreased with the amount of training days. Company size revealed to be marginal positive
significant. The more an organization features a high number of employees, the more employees
are intending to leave. Therefore it disagreed with the hypothesis in this study, assuming that
employees prefer organization with high amount of personnel. Apart from the several
significances of the determinants revealed in this analysis, it should be emphasized that the very
low R², which measures the goodness of the fit is ominous. Thus the utility of the model has to
be questioned.
The demographic model was the less extensive model including two determinants. Age revealed
to have a negative relationship to turnover intent, indicating that the older an employee gets the
less he intends to leave. Tenure also showed to be significantly correlated with the dependent
variable. The longer an individual is employed, the less he will have intentions to leave.
However, this model also features a very low goodness of fit, so that the utility of the model also
needs to be discussed.
The integrated model included significant determinants of psychological, economic and
demographic determinants. All psychological determinants, from psychological contract to job
insecurity remained highly significant. Once more, job satisfaction was shown to have the
highest impact on turnover intent in the integrated model. Economic determinants changed their
importance. Only external opportunities still appeared to be important in the turnover intent
decision. Training had no significant impact on turnover intent in this model. This paper assumes
that the amount of training is not sufficient to bring out the relevant relationship between training
61 Turnover Intent
and turnover intent. Company size showed no significant effect on turnover intent, indicating
that the size of an organization does not have an important role in the turnover behavior. The
demographic determinant age still resulted to be significant, whereas tenure showed to have no
significant relationship to turnover intent when integrating all determinants in one model.
The moderating findings showed no significant effects. Gender did not moderate the effect
between organizational commitment and turnover intent. The relationship was not stronger for
male employees. The effect of job satisfaction on the dependent variable was not moderated by
gender. The assertion that women tend to be more satisfied at work than men was refuted. The
interaction effect of gender and education on intentions to leave revealed to be not significant.
Less educated women do not differ in their turnover behavior from men. Education did not
moderate the effect of age on turnover intent, thus young higher educated employees are not
more likely to have higher intent to leave. However, it showed also a low fit of the model.
According to the empirical findings, psychological determinants showed to have the strongest
effect on turnover intent. The low R² of the economic and demographic analysis pointed out that
the utility of the models are ominous. The integrated model indicated the same results on
psychological determinants; however some economic and demographic variables change their
significance, which can be traced back to the inadequate models. Concerning the moderators,
none of the four analyses revealed significant effects.
62 Turnover Intent
6. Summary
6.1. Research results
One purpose of this study is to understand the phenomenon turnover intent by examining several
theories and models describing and explaining reasons for turnover behavior. At first, different
theoretical concepts were presented that indicate an explanation for the occurrence of turnover.
According to the Social-Exchange theory, turnover intent will emerge as soon as the costs
outweigh the benefits, thus the employee perceives an unfair exchange process. Human capital
theory explains why company specific training has an inverse relationship to turnover intent. The
higher the investments are on specific knowledge, the higher the considered transaction costs
will be and thus turnover intent will be less attractive. Search and matching theories describe an
inverse correlation between tenure and the dependent variable by assuming that at the beginning
of a job search process, people have different expectations, which can be evaluated once the
individual starts his employment. If the current job does not match with the employee’s
expectations, then thoughts about quitting may arise. The evaluation usually happens at an early
stage of the employment. The Equity theory proposes that employees determine whether the fair
balance between inputs (e.g. hard work) and outputs (e.g. wages) exist. If an employee perceives
the distribution of resources as unfair, then turnover intent will emerge. Organizational
equilibrium theory discusses how organizations are dependent on the continuity of participants’
contributions and in order to maintain this situation, organizations have to offer equitable
inducements, otherwise turnover intent can turn to an issue.
Five key models that are rather derived from the psychological school were illustrated, described
and critiqued. While some of the presented models had shaped the turnover research over the
past decades, none of them offers a universally acceptable model for understanding and
interpreting the turnover process as a whole (Lee and Mitchell, 1999). The unfolding model by
Lee and Mitchell (1994) offers an alternative perspective; however, it includes many
unclassifiable routes that still need to be examined, showing that there is a need for a new model.
The second purpose of this study is to conduct an empirical derivation of the factors that have an
impact on turnover intent of Swiss employees based on HR Barometer 2007. A wide range of
factors have been found useful, which were discussed in the various theories and models, when it
63 Turnover Intent
came to interpret the turnover behavior. They were categorized into psychological, economical
or demographical determinants and moderators. The different categories were first separately
analyzed. Significant determinants in each group were then integrated into one model. It resulted
that psychological dimensions featured highly significant impacts on turnover intent and it also
turned out that they had the strongest coefficients. Job satisfaction showed the highest significant
coefficients, whereas age featured the lowest significant coefficient. However, the weak results
of some economic and demographical determinants may be explained by the low R-squared,
which indicated a bad fit of the models. All four moderating hypotheses were rejected.
6.2. Limitations
Limitations refer to the empirical examination in this study. The HR Barometer 2007 is an
established survey that measures various labor situations of Swiss employees. Turnover intent
was not the main focus of this questionnaire, thus this initial position implicated several
restrictions. The construct validity has to be discussed. This validity has to do with the precision
of the constructs, such as the setting of the data set, and whether the constructs were correctly
operationalized. Factors that have been examined about their impact on turnover intent were
based on the given data set. However, the complexity of a turnover intent issue includes further
intervening variables, which were not included or were not approximately measured in the
survey. The particular operationalization of a turnover intent construct in this study was not
adequately measured.
External validity relates to a generalization of the findings from a sample to a population, to
other subject populations, to other settings or to other time periods. The empirical examination
can be generalized for Swiss employees. However, considering it to be valid generally, which is
to all cultures, has to be questioned.
6.3. Future Research
Several theories and models have been found to be useful for a better understanding of the
turnover behavior. However, particularly established models failed to explain the phenomenon as
a whole. They have not been wholly satisfactory in predicting turnover, thus a re-
conceptualization of the models seems to be in order.
64 Turnover Intent
Further testing might include a re-examination of the factor structure of the model or adding
other factors that have been found to be important in predicting turnover intent. The data set of
HR Barometer 2007 surveyed the “Human Side of Enterprise” as a whole, thus turnover intent
was not the main focus of the questionnaire. Consequently important factors that have an impact
on turnover intent were not included. These and other issues remained to be addressed to clarify
the understanding of the turnover behavior. Below you will find several factors that can be
included for another survey.
The importance of the relationship between performance and turnover were explored in several
studies (e.g. Allen&Griffeth, 2001). Retaining high performers is a big issue for an organization,
since it can be devastating for organizational efficiency (Tziner&Birati, 1996). In contrast, if
poor performers leave the organization, this can be beneficial in some circumstances. However,
the relationship between job performance and turnover intent remains unclear. Some studies
argued that performance-turnover relationship is more likely to be negative, since they assumed
that high performers receive greater rewards and therefore have less desire to leave (e.g.
Price&Mueller, 1981). Yet other studies showed a positive relationship between the two
variables, arguing that higher performers are supposable to have more alternative job
opportunities and thus are more likely to be able to change their jobs (e.g. Lance, 1988). The
relationship performance-turnover can be traced back to the theory of March and Simon in 1958
(see Chapter 2.1.) about the desirability and ease of movement emphasizing the effects of
performance on satisfaction and those emphasizing the effects of performance on alternatives
representing competing perspectives (Allen&Griffeth, 2001). Thus the main effect and
moderating effect of performance on turnover intent has to be examined and has to be
categorized as an economic factor.
Marital status, also called kinship responsibilities, has to be considered in the turnover process as
a potentially significant demographic determinant. The cost of a job change increases when the
whole family is involved. It resulted that married employees typically are found to be less likely
to quit than unmarried people (e.g. Cotton&Tuttle, 1996; Hom&Griffeth, 1991). The existence of
children in school age can also have a negative impact on job mobility (Henneberger&Sousa-
Poza, 2002: p. 34). The following intervening sequence appears reasonable: Having a family
produces some obligations and these obligations are most easily fulfilled by remaining with the
65 Turnover Intent
current employer, thus turnover may be less attractive. Furthermore, younger and unmarried men
feature a high turnover rate (Hennbergerger&Sousa-Poza, 2007: p. 18).
Structural variables associated with the work environment need to be included and can be
categorized in social-psychological factors. Frequently discussed in literature is the dimension
“social support” which is defined as “the degree of consideration individuals receive from their
members of their social network” (Iverson, 1999: p. 402). One type of social support is
supervisory support and was examined in this study. The second type is the co-worker or peer
support and still needs to be included in a future study. Peer support is one concern in sociology
and it discusses issues about integration, work group cohesion, social capital and primary groups
(Price, 2001: 607). Peer support is expected to lower turnover intent by a positive impact on job
satisfaction.
Although training was examined in this study resulting to have a negative relationship to
turnover intent, it is also important to distinguish between specific and general training.
According to Becker (1993), perfectly general training requires training to raise an employee’s
marginal product equally at all firms. General training is usually not paid by the employer and
makes the employee easily replaceable, but on the other hand makes them more attractive for
other organizations (Henneberger&Sousa-Poza, 2007: p. 53). General training can increase
turnover intentions. Specific training is defined as a “training that has no effect on the
productivity of trainees that would be useful in other firms” (Becker, 1993: p. 40). Turnover
becomes more important when costs are imposed on employees or organizations, which are the
effects of specific training. Important in this study is the consequence of turnover for an
employee. The investment on a specific training is more likely to be protected by the
organization, for instance by giving the employee a higher wage, since the costs are often borne
by the organization (Henneberger&Sousa-Poza, 2007: p. 54). Thus specific training, as an
economic determinant, decreases turnover intentions.
A negative correlation between unemployment and turnover intent is to be assumed. Increasing
unemployment rate deteriorate generally alteration options, due to the decreasing probability of
offers for better jobs (Henneberger&Sousa-Poza, 2002: p. 32). Unemployment needs to be
categorized as an economic variable. The development of unemployment and turnover rates over
time can reveal interesting findings.
66 Turnover Intent
Career commitment has to be examined to have a moderating role on the relationship of affective
commitment and turnover intent. Employees that are committed to the company are less likely to
leave, and the degree is stronger for those highly committed to their careers (Chang, 1999: p.
1260).
6.4. Conclusion
Understanding turnover intent is important because when employees choose to leave, there are
multiple direct and indirect costs and other consequences on organizational efficiency. Greater
comprehension of turnover intent can allow for targeted intervention. Several theoretical
concepts were presented explaining the occurrence of turnover intent. After discussing and
criticizing established turnover models there is an indication that a need of a new model exists.
According to the empirical investigation in this study, psychological determinants, such as
psychological contract or job satisfactions, seem to have the strongest impact on turnover intent.
Economic and demographic determinants as well as moderating variables provided weak
empirical foundation, thus conclusive statements about their influence on turnover intent cannot
be made.
This study revealed once more the complexity of the turnover behavior and indicated that there
are still improvement opportunities for future studies in order to specifically understand this
phenomenon.
67 Turnover Intent
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Data set
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