Enabling Budgeting and Employee Turnover Intentions : The Role of Error Management Climate and Error Aversion Climate

Employee turnover has received growing attention during the Great Resignation following the COVID-19 pandemic. This study investigates whether and how enabling budgeting is associated with lower employee turnover intentions. We draw on signaling and organizational support theories to argue that the extent to which a budgeting process is perceived by employees as being enabling will be directly associated with higher levels of perceived organizational support which, social exchange theory suggests, will then be associated with lower turnover intentions. We also expect that enabling budgeting will be associated with perceived organizational support by promoting an organizational climate that encourages employees to openly discuss, learn from, and correct errors (i.e., error management climate) while discouraging a climate in which errors are hidden and associated with employee stress and anxiety (i.e., error aversion climate). Using a survey sample of 213 employees with budgeting experience, we find that enabling budgeting controls are positively associated with perceived organizational support and negatively associated with turnover intention through higher levels of error management climate and lower levels of error aversion climate. Our findings contribute to research and practice by identifying how a common control practice, enabling budgeting, can shape employees' error climate and organizational support perceptions, and lead to lower turnover intentions