Too much tenure? Nonlinear effects and moderated influences of unit‐level tenure and labor productivity

Abstract

AbstractThis study contributes to human capital resource literature by providing a robust and theoretically grounded examination of the relationship between unit‐level tenure and performance. We (a) posit and test the notion of a positive nonlinear relationship between aggregate tenure and labor productivity and (b) expand the current conceptualizations of unit‐level tenure to examine the joint and interactive effects of aggregate tenure and tenure dispersion on labor productivity. Utilizing time‐lagged data collected from a field‐sample of 514 college bookstores, we report findings suggesting that unit‐level aggregate tenure has a positive but nonlinear relationship with labor productivity such that increasing tenure beyond an optimum point produces diminishing returns. These results are replicated in a second study conducted with a cross‐sectional sample of 727 service organizations in the United States. Further, our findings indicate that tenure dispersion is negatively related to labor productivity but positively moderates the relationship between aggregated tenure and labor productivity.