1
Redesign of a Model of Managerial Employee Turnover
Shari L. Peterson
Associate Professor
Department of Organizational Leadership, Policy, and Development
College of Education and Human Development
University of Minnesota
peter007@umn.edu
612-624-4980
Huh Jung Hahn
Graduate Assistant
Department of Organizational Leadership, Policy, and Development
College of Education and Human Development
University of Minnesota
hahnx225@umn.edu
Christina Stello
Graduate Assistant
Department of Organizational Leadership, Policy, and Development
College of Education and Human Development
University of Minnesota
stel0034@umn.edu
612-709-3705
Bruce A. Center
Coordinator, Office of Research Consultation & Services
College of Education and Human Development
University of Minnesota
Cente001@umn.edu
612-624-6886
and
Laura Le
Research Assistant, Office of Research
Consultation & Services
College of Education and Human
Development
University of Minnesota
free0312@umn.edu
612-624-6083
Amanuel Medhanie
Research Assistant, Office of Research
Consultation & Services
College of Education and Human
Development
University of Minnesota
medha001@umn.edu
612-624-6886
Stream:
#3 Critical, Theoretical, and Methodological Issues in HRD
Type:
Work in Progress
Key Words: Employee Turnover, Longitudinal SEM, Theoretical Model
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Abstract
Previous as well as current literature consistently argues that studies of employee
turnover need to be longitudinal. The purpose of this work in progress was to reexamine a longitudinal model using structural equations modeling (SEM) to determine if
it remains valid in predicting turnover. With a sample of over 1400 managerial
employees in retail and government agencies, the results of both models confirmed the
predictive power of the model. Initial intention, goals, commitment, and satisfaction and
Career decision-making self-efficacy significantly contributed to Overall Integration
which comprised Performance, Social, Career-path, and Extra-organizational
integration. Overall integration forged a direct path to the actual Turnover decision in
both samples. To date, implications for HRD appear to be strong in terms of the need to
create a culture in which managers perceive a sense of connectedness with their work
unit, leadership, and peers, and one in which there are opportunities for career growth
as well as work-life balance—these dimensions may be conducive to retaining talented
managers. However, there also were some curious findings that need to be explored
further before the model can be reaffirmed as representing a predictive theory of
managerial turnover.
Redesign of a Managerial Employee Turnover Model
The literature consistently has argued that studies of employee turnover need to
be longitudinal if, legitimately, they are to measure an organization’s impact on
employee decisions to stay or leave an organization; and they continue to do so (e.g.,
Steel, 2002; Joo, 2010; Moen et al. 2011). One such longitudinal model, The
Organizational Model of Managerial Employee Persistence (Peterson, 2004), was
operationalized; the resulting Organizational Integration Survey of Managerial
Employees was found to be a valid instrument to measure employee turnover utilizing
logistic regression (Peterson, 2007; 2009). However, the instrument was lengthy, and
did not include economic or other dimensions outside the control of the organization, as
have other researchers (e.g., Hom and Griffeth 1995; Swider et al 2011). For example,
Hom and Griffeth (1995) suggested labor market dimensions as a predictor of turnover
and Swider et al. (2011) included job alternatives outside organizations as a mediator
between job search and turnover. In the intervening years, other new variables have
emerged such as employee well-being (Wright and Bonett 2007), organizational justice
(Radzi et al. 2009), and perceived organizational learning cultures (Joo, 2010).
Clearly, the turnover issue has not been resolved and the problem remains:
employee turnover is expensive. The costs are especially high to replace managerial
expertise, knowledge, and skills (Abbassi and Hollman 2000; Peterson, 2007; Moynihan
and Landuyt 2008). In fact, the cost to replace a manager can range from 70-200% of
salary (O'Connell and Kung 2007), and replacement costs are not the only costs
associated with excessive turnover. Turnover also has an adverse impact on job
performance (Zimmerman and Darnold 2009), lost productivity (Moynihan and Landuyt
2008), and development of the managers who remain (O’Connell and Kung 2009). For
example, Moynihan and Landuyt (2008) noted the indirect cost of strain on HRD
professionals for the performance improvement and training of those managers who
remain. Finally, regardless of the numerous studies on the topic, no additional
sophisticated longitudinal designs have emerged.
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Therefore, considering continued calls for longitudinal studies measuring actual
turnover (as opposed to the often used surrogate, intention to stay or leave), and given
that such a model and instrument already exist, the purpose of the current study is to reexamine that model to determine if it remains a viable approach. Thus, the research
questions are: How viable was the Peterson (2004) model and instrument in predicting
turnover? Is there a need to modify the model and/or instrument?
1 Literature Review
1.1 The Organizational Model of Employee Persistence
The purpose of Peterson’s (2004) theoretical model, the Organizational Model of
Employee Persistence, was to clarify the impact of organizational practices on
employee turnover and provide a foundation for research and theory development on
employee turnover from an HRD perspective. This model addressed the shortcomings
of previous models by (a) calling attention to the magnitude of the role of the
organization, (b) including dimensions that represented supervisory relationship, career
planning, and career decision making, (c) longitudinally extending to the actual turnover
decision, and (d) hypothesizing the symbiotic and reciprocal relationship between
organizational variables and individual variables. As noted above, although the model
was grounded in the theoretical foundations of turnover, socialization, and educational
attrition, it was not all-inclusive. For example, it did not include such external
environmental influences as the economic situation or the internal dimension of salary.
However, according to Peterson (2004, 2007, 2009), these omissions were intentional the focus was on internal organizational behaviors in order to address factors over
which the organization has substantial control and over which HRD can play a critical
role.
The Peterson (2004) model included individual pre-entry attributes of the
employee (such as demographic variables, abilities, skills, behavioral attributes, and
career decision-making self-efficacy) but focused on the role of the organization in
integrating employees into the performance, social, career-path, and extraorganizational systems of the organization that might influence the individual’s intention,
goals, commitment, and satisfaction. Intention, goals, commitment, and satisfaction
were represented twice – once at entry into the organization and then after socialization
and integration into the organization. Hypothetically, the greater the employees’
integration, the greater would be their developed intention, goals, commitment, and
satisfaction, and thus, the greater their likelihood of persisting.
This model was operationalized by a 79-question survey and tested in 2007 with
retail managers and in 2009 with government employees. The results of both studies
provided sufficient support for the model. However, Peterson (2009) made several
recommendations to (a) fine-tune and further investigate the factor structure, potentially
in order to reduce the number of items, (b) re-examine the two sub-categories of both
Performance Integration and Organizational Integration, potentially to collapse into a
single dimension of each, (c) re-think the time-consuming nature of the longitudinal
nature of the model, and (d) engage in further studies in both the public and private
domains.
1.2 Current Literature
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Peterson had conducted thorough reviews of the literature through 2008 and into
2009, so the literature review for this research in progress focuses on some of the
relevant literature from 2009 to present. Much of the recent literature provides support
for the Peterson model and the variables related to organizational experience (i.e.,
Performance, Organizational, Career, and Extra-organizational integration).
One recent study found that employees exhibited the highest organizational
commitment when they perceived a higher learning culture and when they were
supervised in a supportive fashion; this higher organizational commitment explained
about 40% of the variance in turnover intention (Joo, 2010). Joo noted limitations of his
study including not investigating actual turnover data, and thus called for a longitudinal
study to substantiate his conclusions.
Chalofsky and Krishna (2009) addressed extra-organizational integration,
suggesting that organizations that attempt to foster affective commitment must in turn
show their commitment to employees by providing supportive work environments. They
noted that the American workforce wants to be part of an organization that will take care
of them and help them take care of their families, support their growth through skill and
knowledge development, understand their need to have some work-life balance, and
use their skills and abilities in a way that is meaningful.
Opportunities in the realm of career growth and development represent another
key variable in Peterson model—career integration. Preenen et al. (2011) also
addressed the importance of career paths, finding that challenging assignments at work
served as developmental opportunities that were negatively related to turnover intension.
Similarly, with a sample of 264 managerial employees from manufacturing companies,
Kraimer et al (2011) found that turnover increased when employees perceived that work
assignments and job opportunities within the organization were not consistent with their
career interests and goals.
Steel (2002) argued that although turnover theories constantly call for
longitudinal research, little empirical research has been conducted. Little has changed
in the last decade; the current literature continues to call for longitudinal research
designs. Even using a longitudinal design, Moen et al’s (2011) study of turnover
intentions noted that collecting data for eight months still was too short a timeline.
In summary, the past and current literature confirms the need for employee
turnover studies to be longitudinal and to include the actual decision to stay or leave (as
opposed to a surrogate measure). This was the rationale for re-examining the Peterson
model since that model and the instrument used to operationalize the model included
those exact features. Furthermore, the independent variables identified in current
studies did not vary substantively from the variables used in the instrument being reexamined.
2 Method
This work in progress reports the findings based on structural equations
modeling (SEM), in response to the need for a more sophisticated picture of the
strength of the variables that have been found to play a role in managerial employee
turnover among retail organizations and government institutions. In addition to
descriptive statistics, correlations between the various dimensions represented in the
instrument will be reported. The findings based on these measures could be used to
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identify (a) the extent to which the lengthy instrument that operationalized the model
might be shortened from its current 79 items, (b) whether some sections of the model
could be eliminated altogether, and most importantly, (c) the extent to which the
predictive power of the model and instrument is reaffirmed or rejected.
Table 1
Independent Variables
S1
S4
S7
S10
S13
S16
S17
S18
Independent Variables
Initial Intention, Goals, Commitment, and Satisfaction
Career Decision-Making Self-Efficacy (confidence in career information gathering
and decision-making)
Performance Integration (interactions with managers)
Organizational Integration (social aspects and interactions with co-workers)
Career Integration (opportunities to discuss career paths with supervisors)
Extra-Organizational Integration (degrees of work-life balance)
Overall Integration (collective score of Scores 1-16)
Developed Intention, Goals, Commitment, and Satisfaction (identical to S1 but
collected several months after the initial survey)
The independent variables are reported as scores (S) as replicated in the
instrument and are identified in Table 1. A single dependent variable (S20) identified
whether managers were still employed in their organization one year following
completion of the surveys in three retail organizations and three government service
institutions.
3 Preliminary Findings
Simple descriptive statistics identified that among the four mean integration
scores as measured on a Likert-type scale ranging from 1 to 5, the level of Performance
Integration was rated highest both by government institutions (3.97) and retail
organizations (4.05). Table 2 also identifies that Career Integration was rated lowest by
both government institutions (3.24) and retail organizations (3.17). However, across all
scores—the four integration scores, plus Initial Intention, Goals, Commitment, and
Satisfaction, and Career Decision-making Self-efficacy— government institutions rated
Initial Intention, Goals, Commitment, and Satisfaction highest (4.31), followed by Career
Decision-Making Self-Efficacy (4.05). This was the identical finding for retail
organizations, rating Initial Intention, Goals, Commitment, and Satisfaction highest
(4.31), also followed by Career Decision-Making Self-Efficacy (4.13). These findings are
important because they influenced the initial construction of the structural equations
models for both samples.
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Table 2
Descriptive Statistics
n
mean
S.D.
681
681
4.31
4.05
0.56
0.57
675
676
677
677
677
3.97
3.65
3.24
3.73
3.65
0.48
0.55
0.74
0.55
0.48
527
528
4.31
4.13
0.60
0.58
472
474
474
474
474
4.05
3.78
3.17
3.66
3.66
0.51
0.58
0.80
0.64
0.52
Government Institutions
Initial goals, commitment. . .
Career decision-making selfefficacy
Performance integration
Organizational integration
Career integration
Extra-organizational integ.
Overall integration
Retail Organizations
Initial goals, commitment. . .
Career decision-making selfefficacy
Performance integration
Organizational integration
Career integration
Extra-organizational integ.
Overall integration
The correlation matrix (see Table 3) identified moderate to high correlations
between all of the independent variables (S1-S16). When analyzing only the integration
scores (S 7- 16), the highest correlations were between Performance Integration and
Social Integration (r = .656) and between Career Integration and Social Integration (r =
.622). This information also contributed to the initial construction of the SEM.
Table 3
Correlations Between Main Scores*
S
S1
S4
S7
S10
S13
S16
Initial
Goals
(S1)
.366
.377
.282
.186
.249
CDMSE
(S4)
.505
.359
.370
.323
Performance
Integration
(S7)
.656
.525
.481
Organizational
Integration
(S10)
.622
.502
Career
Integration
(S13)
.494
ExtraOrganizational
Integration
(S16)
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* All correlations were significant (p =.000)
A separate SEM model (using MPLUS V.5) was constructed for the retail sector
and for the government institutions. In addition to identifying the path model to the
dependent variable that emerges, two statistics are particularly important to the
goodness of fit of the model— Comparative Fit Index (CFI) and Root Mean Square
Approximation (RMSEA). CFI ranges from 0 to 1, and the closer to 1, the more robust.
On the other hand, the lower the RMSEA score the better, and it should be less than
.06.) For the retail sector (See Figure 1), initial findings identified a path model with a
CFI of .987 and RMSEA of .048. The independent variable, Overall Integration,
significantly and directly explained the decision of retail managers to stay
(.07). As
.
expected, Initial Intention, Goals, Commitment, and Satisfaction (S1) provided
a direct
0
path (.28) to Integration as did Career decision-making Self-efficacy (.38),
and all of the
2
separate integration scores, the highest of which was Career Integration (S13).
Surprisingly, Developed Intention, Goals, Commitment, and Satisfaction (a longitudinal
variable, S18), was not significant, and was the only variable in the model not to have a
direct or even indirect path to the turnover decision (S20). Overall, the model accounted
for most of the variability, and the goodness of fit suggests that it is a plausible model.
The model tested with managers in governmental agencies also was found to be
plausible with an even higher CFI (.997) and lower RMSEA (.025). All of the variables
significantly interacted, and, the path scores suggest that all of the variables are
important, (See Figure 2). As expected, Developed Intention, Goals, Commitment,
and Satisfaction (S18) forged a significant and direct .path (.17).
Most interesting is that
.
.
while Overall Integration also directly predicted the turnover event, the path was
0
0
negative (-.13), such that overall integration results in being less0 likely- to stay. Thus,
6
5
within the government sample, the greater the managers’
integration,
2
. the greater their
likelihood of leaving. As in the retail sample, the greatest
contributor
to
Overall
.
0
Integration was Career Integration (S 13), also followed by Performance Integration (S7;
0
2
.95).
2
8
Figure 1. Final path diagram for retail organizations. The '1' is fixed by MPLUS
and arbitrary. All the other coefficients are relative to this one. As the largest coefficient,
it is clearly and highly significant.
______________________________________________________________________
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Figure 2. Final path diagram for government institutions.
______________________________________________________________________
4 Discussion
With a sample of over 1400 managerial employees in retail organizations and
government institutions, two separate SEM models (using MPLUS V.5) confirmed that
the Peterson model was useful in predicting turnover. The path model for the retail
sector was strong with a high CFI of .987 and RMSEA of only .048. All of the
independent variables were significant, but only Overall Integration forged a direct path
to the decision of retail managers to stay (.07). However, both individual independent
variables, Career decision-making Self-efficacy (S4, .38) and Initial Goals, Commitment,
& Satisfaction (S1; .28), forged an indirect path—through Overall Integration. Score 1
was the only variable to forge a direct path to more than one variable and that additional
variable was, not surprisingly, Developed Intention, Goals, Commitment, & Satisfaction
(S18). This preliminary finding clearly needs to be explored further, but perhaps it is in
part due to the fact that this variable (S18) was highly significant in forging a rather large
path (.51) to Overall Integration. Thus it is also in part. indirectly related to the actual
.
turnover decision.
.
0
0
The model tested with managers in governmental agencies
was found to be
0 also
9
5
plausible with an even higher CFI (.997) and lower RMSEA
(.025).
All
of
the variables
2
.
*
significantly interacted, but inconsistent with the retail sample,
* Developed Intention,
*.
*0
2
*
0
2
*
10
Goals, Commitment, & Satisfaction did forge a direct path (.17) to the turnover decision.
Inconsistent with the retail sample, Overall Integration directly predicted the turnover
event (-.13), but the higher the integration score, the less likelihood of the manager
staying in the organization. Government workers are unique in terms of the length of
their tenure, the nature of productivity expectations, and the overall organizational
culture. While the model itself appears to be supported, the nature of the four integration
scores that made up Overall Integration in government institutions need to be examined
in greater depth because of this unusual finding.
5 Conclusions and Implications for Research and Practice
In recent years, research on organizational commitment, organizational
citizenship, and employee turnover has emerged as one of the most important strands
of HRD research (Ardichvili, 2011). We began this work in progress with questions
about the viability of the Peterson (2004) model and instrument in predicting turnover
and whether or the model and/or instrument needed to be modified. Findings to date
suggest that the model is reasonably plausible based on strong paths to the turnover
decision for both rather large samples. However the research to date has not examined
the extent to which the survey might be adapted to make it shorter, thus more efficient.
The concern is that the information contained in the items provides rich detail that could
be instructive to the HRD and line managers of an organization. To eliminate many of
those items for the sake of efficiency, while potentially not reducing the reliability, would
reduce the depth of information for the participating organizations.
Implications for HRD are strong in terms of the need to create a culture in which
managers perceive a sense of connectedness with their work unit, leadership, and
peers, and one in which there are opportunities for career growth as well as work-life
balance—these dimensions are conducive to retaining talented managers. The model
intentionally focused on factors within the organization because these are factors the
organization can influence. Using the findings of this study, organizations can focus on
strategies to improve managerial retention in the correlated areas. However, given the
mixed findings, the role of Overall Integration needs to be clarified.
Implications for further research include conducting a new longitudinal study to
(a) determine whether the findings of the current SEM can be replicated or whether they
are industry specific and (b) assess results during a more challenging economic climate.
The initial purpose of re- testing the Peterson model was to find a rationale for revising
it; however, it appears to be reasonably plausible as it is. The question remains as to
the nature of the different findings in the two samples—curious and unexpected and,
while related to the same direct effect on the turnover decision, related in very different
ways.
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