Meta-Analytic Review of Employee Turnover as a Predictor of Firm Performance

Previous research has primarily revealed a negative relationship between collective employee turnover and organizational performance. However, this research also suggests underlying complexity in the relationship. To clarify the nature of this relationship, the authors conduct a meta-analytic review in which they test and provide support for a portion of Hausknecht and Trevor's model of collective turnover. The authors' meta-analysis includes 48 independent samples reporting 157 effect size estimates (N = 24,943), tests six hypothesized moderator variables, and provides path analyses to test alternative conceptualizations of the turnover-organizational performance relationship. Results indicate that the mean corrected correlation between turnover and organizational performance is -.03, but this relationship is moderated by several important variables. For example, the relationship is stronger in manufacturing and transportation industries (-.07), for managerial employees (-.08), in midsize organizations (-.07), in samples from labor market economies (-.05), and when organizational performance is operationalized in terms of customer service (-.10) or quality and safety (-.12) metrics. In addition, proximal performance outcomes mediate relationships with financial performance. The authors discuss implications of their results for theory and practice and provide directions for future research.