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The neglected state of organizational-level turnover studies in the Chinese context: a call for research

Frontiers of Business Research in ChinaSelected Publications from Chinese Universities201711:6

https://doi.org/10.1186/s11782-017-0001-y

  • Received: 27 February 2017
  • Accepted: 28 February 2017
  • Published:

Abstract

In this essay, the authors discuss the neglected state of organizational-level turnover research in the Chinese context. They provide a brief overview of the importance of turnover research in the organizational sciences, highlight the role of performance-related turnover rates research, and outline general theories and findings that appear in the Western and English-language literature. This evidence is compared with a dearth of studies using samples of Chinese organizations and in Chinese-language journals. They conclude by calling for additional theory and empirical studies on turnover rates.

Keywords

  • Turnover
  • Retention
  • Strategic human resource management
  • Organizational performance
  • Productivity
  • Strategic management

The study of turnover—voluntary and involuntary departures from the organization—spans 100 years and the area is considered a foundation area within industrial and organizational psychology, human resource management, and organizational behavior (Hom et al., 2017). Aside from the practical value of turnover research, this domain has produced some of the most iconic individual-level theories in our field, such as March and Simon’s (1958) pioneering desirability and ease of movement theory, Mobley’s (1979) job content model, Lee and Mitchell’s (1994) unfolding model, and Mitchell et al.’s (2001) job embeddedness theory. Spanning nearly 70 years, these theories provide detailed, multifaceted explanations for why people quit their jobs and why they stay.

In terms of implications for management and organizations, organizational-level turnover research may be even more critical. This stream details not only the antecedents of turnover patterns in organizations, but also how workforce churn impacts the organizational performance. At this level of analysis, the research tradition is nearly as rich. Researchers in many disciplines (e.g., management, finance, economics, sociology, medicine, marketing, and public administration) have detailed conceptual models and accompanied them with empirical testing for why and how the organizational context and practices influence quit and discharge rates (e.g., Batt and Colvin, 2011; Shaw et al., 1998) and for how turnover patterns relate to important outcomes such as accident rates, productivity, profitability, and stock market returns (e.g., Arthur, 1994; Huselid, 1995; Shaw, Gupta, et al., 2005; Shaw, Duffy, et al., 2005). These findings are showcased in two major meta-analyses (Heavey et al., 2013; Park and Shaw, 2013). Theory tradition at the organizational level is also abundant; major, differential theories have been developed or brought to bear in economics, sociology, human resource management, and organizational behavior, to name a few (Park and Shaw, 2013; Shaw, Gupta, et al., 2005).

In this editorial, we outline the importance of such organizational-level turnover rate research and note the striking dearth and major omission of this type of research in the Chinese context, and outline a call for contextual and industry studies in China to fill the gap.

The importance of turnover rate and organizational performance research

The organizational-level turnover literature is poly-theoretic; four main themes predominate (Park and Shaw, 2013). The first is a view of depletion via human capital or social capital losses. Per this perspective, higher turnover rates damage organizational performance by reducing the organization’s ability to function effectively. The mechanisms between voluntary turnover and the ultimate financial performance of the organization are presumed to be workforce-related, viz., lower productivity and customer satisfaction as well as higher disruption, accidents and errors. A related view originated in Price’s (1977) sociological perspective on turnover. Price’s (1977) theorization takes a similar direction of thought, but instead presumes that turnover effects are not monotonic. Instead, he argues that the first instances of voluntary quits are the most damaging to performance (Shaw, Gupta, et al., 2005). In this view, a rise from zero turnover to moderate levels creates the most impactful loss of knowledge, skills, and abilities (Alexander et al., 1994; Shaw et al., 2013) and the most significant disruption-creating gaps in organizational communication networks (Shaw, Duffy, et al., 2005).

A third view originates in the organizational behavior literature and, perhaps, enjoys the most popularity, but the least empirical support, in terms of describing turnover’s effects. Dalton and Todor (1979) and others lauded a functional view of turnover, arguing that moderate turnover rates bring new ideas and infuse the organization with stagnation-fighting energy from outside. In direct opposition to Price’s (1977) arguments, the functional view presupposes that low-to-moderate turnover improves organizational functioning; Price (1977) suggests that these levels are the most damaging. In the inverted-U view, at higher turnover levels the negative depletion effects on performance will ultimately prevail. It is difficult to search the literature and find examples that support the inverted-U approach unequivocally; Glebbeek and Bax (2004) and Siebert and Zubanov (2009) offer some limited support (see, Shaw (2011), for a review). A fourth view is a classic contingency model that originated in the strategic HRM literature. Arthur (1994) argued and found that the relationship between turnover rates and performance was moderated by how much the organization had invested in its people (see also Guthrie (2001) and Shaw et al. (2013)). High investment organizations tend to perform better, but suffer greater productivity loss via turnover than organizations that invest little in their people.

In more recent years, researchers have attempted to synthesize and extend these founding theories by considering the role of replacements or hiring in assuaging the negative effects of turnover (e.g., Nyberg and Ployhart, 2013) and by factoring in the timing or clustering of turnover (Hausknecht and Holwerda, 2013). These new advancements have spurred a spate of additional empirical testing and hastened accumulation the evidence (Call et al., 2015; Reilly et al., 2014). As noted by Shaw (2017), the morass of organizational-level theory may have created some initial confusion, but the upside to the situation was a vast amount of empirical testing of alternative formulations. Thus, in addition to the presumed practical value of examining these relationships, the empirical literature provided the fuel for two comprehensive meta-analytic studies (Heavey et al., 2013; Park & Shaw, 2013), which confirm practically significant negative relationships between turnover rates and performance outcomes. These meta-analyses also show (1) little evidence to support other formulations other than practically important declines in performance as turnover rates rise, (2) few differences in turnover rate relationships across voluntary and total turnover operationalizations, and (3) some evidence that turnover rate effects differ across employment relationships and job types.

Organizational turnover research in the Chinese context—a missing link

A call for research

The preceding review makes the purpose of this essay—a call for additional organizational-level turnover and performance research—clear. Our search efforts were meticulous, if not exhaustive. These endeavors uncovered only a handful of Chinese studies, while hundreds of such studies conducted in Western samples appear in the Western literature. The reasons for the dearth are unknown, but we can offer some speculation. First, it is possible that researchers believe that turnover consequences are not as severe in this context. The meta-analytic evidence does show that the turnover—organizational performance correlation is somewhat weaker in Asian samples (Park and Shaw, 2013) but it is difficult to place confidence in this comparison given the small number of Asian-sample studies. Second, it is possible that it is more difficult to collect or obtain such data in China compared to North America, where most of the studies originate. In the North American context, key-informant research designs are plentiful (Gupta and Shaw, 2000). In these studies, turnover data are typically obtained from key informants (e.g., plant managers or HRM managers) in large samples of organizations within or across industries. These turnover reports are then placed into empirical models with archival data obtained from industry associations, government databases, or purchased from third-party suppliers (e.g., Huselid, 1995; Shaw et al., 2009). Although individual-level survey data sets seem to be relatively easy to collect within Chinese organizations, organizational-level research conducted with a key informant design appears to be lacking. Third, strong industrial associations often characterize or bring together organizations in Western industries. Researchers are often able to access organizations and data via industry associations and trade conferences. These connections lead researchers to rich data sources underpinning years’ worth of within-industry studies, for example, in automobile manufacturing (MacDuffie et al., 1996; Jacobides et al., 2016) and trucking (Shaw et al., 1998; Shaw, Gupta, et al., 2005; Shaw and Gupta, 2007), to name only two. It is possible that these associations function differently in China, making it more difficult for researchers to obtain the data and access needed for large organizational samples.

Whatever the root causes, our contention is that such research is potentially fruitful and may offer insights that are not apparent in the existing broader literature. First, there is certainly a need to continue to test alternative theories of the turnover—performance relationships that already appear in the literature. Indeed, as Shaw, Gupta, et al., (2005) and others have pointed out, tests of differential or competing theories are needed in the literature, as are attempts to integrate these alternative theories (see Nyberg and Ployhart, 2013; Shaw et al., 2013). Second, it is certainly possible that turnover—performance dynamics operate differently in Chinese organizations, leaving open the possibility for new theoretical development and empirical comparisons against existing conceptual foundations. Third, there are many clear differences in employment relationships, workforce management, and the labor market in China. These contextual factors could be brought to bear as antecedents of turnover rates, or as moderating factors between workforce outflow and performance. Fourth, Chinese organizations face some temporal and seasonal challenges that are unique. For example, there are severe, yet somewhat predictable, mass turnover events after the Lunar Year Holiday and/or after bonus payments. In addition, many organizations near metropolitan centers deal with frequent influx and outflow of migrant workers, which creates administrative, hiring, exit, and productivity-related challenges that are not seen in Western countries where the residential population and labor market are more stable.

To conclude, we hope this call challenges and energizes Chinese researchers to consider the value in turnover rate studies at the unit and organization level. Such endeavors will surely balance the scales of empirical evidence. Additional studies in the fascinating Chinese context will also likely lead to facets of insights that, despite its 100-year history, have yet to be observed in the turnover literature.

Declarations

Acknowledgements

None.

Authors’ contribution

JDS drafted the initial version of the paper. JDS and SS then iterated work on subsequent drafts of the paper until a final version was agreed upon. Both authors read and approved the final manuscript.

Competing interests

The authors declare that they have no competing interests.

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Open AccessThis article is distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license, and indicate if changes were made.

Authors’ Affiliations

(1)
Faculty of Business, The Hong Kong Polytechnic University, Li Ka Shing Tower 829, Hung Hom, Kowloon, Hong Kong

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