Business Psychology - Latest Findings

Article No. 271
Business Practice Findings, by James Larsen, Ph.D.

Turnover and Performance

New research explores links between turnover and performance
and discovers new ways to influence both.

Meet Jack.

Jack works in a small town bank using his accounting degree to fill many roles. He also coaches the town�s little league baseball team using his experience as a star on the state university�s baseball team. The bank president who hired Jack is well pleased with this community volunteer work. He believes it will help draw customers into the bank.

Next, meet Sarah.

Sarah is an engineer in a large, diversified industrial firm, and soon after taking her position, she was assigned to a special project team. Her work on this team was in addition to her other duties.

In her first meeting, Sarah found herself with a diverse group of people representing specialties from all over the firm, but she was the only engineer. A vice president chaired this meeting, and after the introductions, he announced the group�s assigned goal: to discover, develop, and bring to market a new product for the company to sell. He went on to say that they were free to organize themselves however they wished, and they were expected to submit progress reports as frequently as they deemed necessary. Having said this, the vice president excused himself and left the room.

Now, in thinking about Jack and Sarah, answer three questions. First, who is more likely to take work home at the end of the day? Second, who is more likely to bring off-the-job work to the place of employment (like baseball schedules)? Finally, who is more likely to seek employment elsewhere?

Jack and Sarah, and the three questions about them, illustrate a recent development in our understanding of employee turnover that links it with performance. According to this new understanding, people form social networks both off the job and on the job, and it is the strength and complexity of these networks that determines if people decide to stay in their jobs and if they decide to exert the effort required to perform well.

As a little league baseball coach, Jack has extensive, off-the-job social contacts. He became a critical member of this social web, and by doing so, he has created a feeling of obligation among the parents of his team members. They could be expected to come to the bank. Jack would also be unlikely to quit, since he�d probably have to move to replace his job, and that would be the end of baseball. But Jack has no special reason to exert effort on this job, and the bank president will probably be noticing that.

As a member of the special project team, Sarah will be developing extensive on-the-job social contacts, and every helpful comment and action offered to help her fulfill her role on this special committee incurs an obligation on her part to return the favor. Sarah�s social network will amplify her effectiveness, and she, in turn, will contribute to others� effectiveness as well. But there�s a problem. Sarah�s life will probably get out of balance and her minimal off-the-job social networks will soon make her feel something is wrong. Moving on to another employer will begin to look attractive to Sarah.

Thomas Lee, from the University of Washington at Seattle, is the most recent researcher to explore the social network theory of turnover and performance. He examined a large sample of employees and found that his measures of off-the-job social networks predicted both turnover and absences from work. The stronger and more complex these social networks, the lower the turnover and absences. His on-the-job measures predicted both job performance and extra-role work behaviors like helping out a co-worker without being asked. The stronger and more complex these on-the-job social networks, the more effective the performance.

Although Lee�s findings were striking, they didn�t surprise him. They are consistent with other researchers� investigations, and this led him to an unusual conclusion. He feels it is time for managers and supervisors to implement the findings of this research by encouraging the social network building process, both on and off the job, and he offers these suggestions:

    1. Create long term projects and assign diverse teams of people to complete them.

    2. Increase rewards according to tenure.

    3. Match unique qualifications of employees with special assignments.

    4. Provide information about the community surrounding the workplace and provide support for local activities and events.

Lee believes these activities will prove to be very beneficial for the firms that implement them.

Reference: Lee, Thomas, Terence Mitchell, Chris Sablynski, James Burton, and Brooks Holtom (2004) The Effects of Job Embeddedness on Organizational Citizenship, Job Performance, Volitional Absences, and Voluntary Turnover. Academy of Management Journal, 47(5), 711-722.

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