Collective Turnover and Unit Performance : Exploring a Dynamic Relationship

Drawing on context-emergent turnover theory, we empirically investigate the relationship between changes in collective turnover rates and unit performance and the moderating roles of the quality and quantity of departed, remaining, and newly hired employees, turnover dispersion, and pay dispersion over time. Using insurance company data for 2,988 sales agents within 126 units across 55 months, we found that changes in turnover rates were negatively related to changes in unit performance after accounting for baseline turnover rates. A high turnover rate at baseline mitigated the negative relationship between changes in that rate and unit performance. Adjusting turnover variables for the quality of employees strengthened those relationships. Furthermore, high quality and a large quantity of replacement hires, high quality of remaining employees, high turnover dispersion, and high vertical pay dispersion mitigated the relationship between changes in turnover rates and unit performance. Implications for context-emergent turnover theory and human capital resources are discussed