The Dynamic Nature of Collective Turnover and Unit Performance: The Impact of Time, Quality, and Replacements

Abstract

This study builds from context-emergent turnover theory to examine the dynamic properties of turnover rates, including: (a) the changing quality and quantity of the human capital resources that depart, (b) the changing turnover dispersion (i.e., how distributed turnover events are over time), and (c) the changing quality and quantity of replacement hires. We examine these properties using data drawn from a sample of retail employees nested within stores of a prominent U.S. retail chain over five quarters, and show that the turnover rate (level) is conceptually and empirically distinct from turnover rate change, and that the two interact with each other to influence changes in unit performance. We also find that the relationship between turnover rate change and change in unit performance is moderated by both the quality of those who leave as well as turnover dispersion. Overall, we contribute to turnover rate, staffing, and human capital resource literatures by testing core context-emergent turnover theory propositions to show when, why, and how turnover rate change and replacement hires, as part of a holistic human capital resource system, influence unit performance.