Turnover & Retention
Keeping High Performers
Turnover Risk of High PerformersHigh performers can be viewed as either more or less likely to leave an organization voluntarily. According to one belief, high performers are more likely to stay at an organization, given that there is a clear line drawn from performance to rewards. On the other hand, high performers are more likely to leave when they feel under-rewarded or when there are greater external opportunities. Some additional factors that change the performance-voluntary turnover relationship are listed below. Factors that impact high performers’ likeliness to turnover include:
- Comparable employees being paid the same amount (or more) for less work, which increases high performers’ likeliness to turnover.
- High performers who perceive that they are being equitably paid for their efforts in comparison to their co-workers, are more likely to stay.
Performance-Voluntary Turnover RelationshipBoth pay growth (the rate that an employee’s total pay changes) and the unemployment rate interact with performance to influence the performance-voluntary turnover relationship, such that high performance leads to low voluntary turnover (and vice versa). Pay growth is important because organizations often use it as a tool to enhance retention. Additionally, on a larger scope, salary growth and bonuses have been found to influence the performance-voluntary turnover relationship. To combat the likelihood that a low unemployment rate will lead to high performers leaving, it is crucial to keep pay growth high. Moreover, these factors work independently of employee job satisfaction influences.
Practical ImplicationsCompared to low performer turnover, high performer turnover can be excessively detrimental to organizational success. The unemployment rate and pay growth findings together show that managers should focus extra attention on higher performing employees when the unemployment rate is low, because if pay growth is also slowed, high performers become more likely to leave. Ultimately, supervisors and upper level managers should keep a few things in mind:
- Due to the differences across performance levels in employee reactions to various organizational environment factors, such as a close relationship between performance and rewards, managers may benefit from tailoring policies toward specific performance groups to achieve desired performance outcomes for each employee.
- Pay growth influences turnover regardless of job satisfaction. Therefore, managers should pay close attention to pay growth.
- Even though current employment markets have produced few job opportunities, managers should remain vigilant about retaining their better performers, who may still be able to find alternative employment.
DeGarmoThis was a summary of the research and practice implications from: Nyberg, A. (2010). Retaining your high performers: Moderators of the performance-job satisfaction-voluntary turnover relationship. Journal of Applied Psychology, 95(3), 440-453.