Organizational turnover costs U.S. businesses billions annually. The problem of turnover in a retail store has been explored here, with the purposes of discovering what main store-specific factors contribute to workers� voluntarily switching jobs, and what practical steps may be taken to reduce turnover. The population consisted of 165 employees of a certain home improvement retail store, whereas the sample (obtained on a stratified, convenience basis) totaled forty-two employees from various functional departments and levels of management. A ten-question survey was used to collect the data. In keeping with the related literature, the data collected suggests that turnover is correlated with dissatisfaction-in this case, what is perceived to be a job situation marked by high customer demand and comparatively low managerial support.
Factors Contributing to Turnover in a Retail Environment
Among business owners, managers and analysts it is generally regarded as common knowledge that organizational turnover is a problem. Some researchers estimate annual direct costs of turnover at well over $100 billion (Gordon & Lowe, 2002), while others have noted the many and varied indirect costs of turnover in terms of employee morale, customer perceptions of service, and overall organizational performance (Dess & Shaw, 2001; Curtis & Wright, 2001). Because turnover of any sort is detrimental-in that it always means a forfeiture of human capital investments, such as training-astute managers are concerned with properly understanding and handling the issues that result in turnover.
This study reflects an effort to understand the broad problem of turnover from a retail perspective, and therefore to discover an answer to the following research question: What main store-specific factors contribute to workers� voluntarily switching companies and/or careers, and what practical steps could retail employers take to reduce dysfunctional (detrimental) turnover? This question in turn calls for a working definition of turnover, along with some consistent and measurable factors that may be seen as contributors to the problem. An examination of the related literature will help bring these concepts into focus.
Review of Literature
Definitions and Implications of Turnover
Any research effort exploring the issue of turnover and its likely causes should include some scholarly consideration of what turnover is and what are its effects. As Moorhead and Griffin (2001) have noted, turnover is simply what occurs "when people quit their jobs" (p. 107). This popular definition fails to account for specific variables bearing on the current study, however. "Turnover" may refer to both job turnover (i.e., "intraorganizational"), such as promotions, and organizational turnover, in which people leave the organization (Keaveney, 1992). Additionally, turnover consists of two split categories: "Voluntary and Involuntary" (Dess & Shaw, 2001; Keaveney, 1992) and "Functional and Dysfunctional" (Keaveney, 1992). That is, organizational turnover is related to two main factors: willingness on the part of the employee to leave, and the impact (positive or negative) of employee turnover on a given organization. Thus it is possible for poor performing employees to leave involuntarily (through termination for example), but because they are poor performers their loss is "functional" for the business. This study concerns voluntary and dysfunctional turnover, and therefore the managerial and organizational issues that tend to precipitate it. (The actual rate of turnover is the rate of replacement, or the number of people leaving an organization during a specified period divided by the average number of people employed during the same period.)
Bottom-line financial costs directly arising from organizational turnover have been estimated by various measures at anywhere from "$140 billion annually" for companies in the United States (Gordon & Lowe, 2002, 8) to "150% of annual salary for key staff" (Curtis & Wright, 2001, 2). Dess and Shaw (2001) argue that whereas isolating the various factors necessary to precisely measure the costs of voluntary turnover is difficult if not impossible, the loss of human capital combined with replacement costs means logically that "voluntary turnover eliminates the organization's return on investment in the employee" (8).
Conditions Associated with Turnover
In a comprehensive study focusing on buyers in the retail industry, Keaveney (1992) disclosed findings consistent with the usual "predictors" or criteria of turnover: Intention to leave; job satisfaction; role conflict; income; and "boundary-spanning activities", i.e., those requiring the crossing of organizational and functional boundaries and related to stress. Though careful to distinguish types of turnover factors such as organizational and personal, Moorhead and Griffin (2001) specifically cite a "poor person-job fit" as a likely cause (p. 107). In positing a negative correlation between voluntary turnover and social capital in the organization, Dess and Shaw (2001) indicate that turnover results from a general failure to recognize employees as social beings and thus to recognize the value of social capital.
Retention may be seen as the opposite of turnover, and according to Curtis and Wright (2001) is correlated with "group cohesion," "dissatisfaction with managers," "feedback on performance," "employee involvement," "pay," "career development," "flexible work options," and "employee benefits." Retention has been elsewhere associated with three central factors: a "positive relationship" with the boss; the "opportunity to remain marketable" through training and development; and "sharing in the financial success" owing to the efforts of the employee (Gordon & Lowe, 2002, 8). Conversely, negative relationships, failure to train, and inequitable wages and benefits may be said to contribute directly to organizational turnover.
Methodology
Population Description and Sampling Procedures
The population consisted of the employees of a certain home improvement retail store, one that employs around 165 people. Sampling was conducted on a stratified, convenience basis within the population of workers currently employed at the store. Responses received fall into various classifications: from part-time and full-time workers, from three levels of management/ authority, and from most store functional departments (representing the store's two main divisions, sales and operations). Though some responses did not indicate department or hourly status, this method secured a fairly even distribution across the store's population in terms of job status, function and position. Just 20 participants noted hourly status: 8 part-time and 12 full-time workers. By position respondents included specifically: one assistant manager (of whom there are 4), two department supervisors (of 14), and 37 hourly workers (of the remaining 148 or so employees), from a total sample size of 42. All sales departments were represented by at least one respondent. Of those who indicated department, 10 worked in operations and 23 in sales. Out of the 42 surveys distributed, 40 were returned completed for a participation rate of 95%.
Data Collection and Analysis
A ten-question survey was designed to address the major issues related to turnover in the related literature, especially the categories proposed by Keaveney (1992) in an extensive empirical study of turnover among retail buyers: intention to leave, job satisfaction, role conflict and boundary-spanning activities (these last two categories were assumed in my survey under questions addressing "management" and "stress" respectively).
Survey questions reflected various scales of measurement. Questions one and two were of the ordinal type, in which choices are arranged along a numerical scale. These were then analyzed in terms of mode and frequency for central tendency. The next two questions asked for the best description of the reason for leaving a certain job, and so data obtained were nominal. Nominal data were analyzed for frequency, percentage and mode. Items five through nine addressed employee attitudes and perceptions on an interval scale-specifically a Likert scale. Results of these were examined for the mean and for standard deviation from the mean. Question ten was the only open-ended item, which among other things evidently yielded one especially prominent concern relevant to the data-though subject to interpretation.
Results
The following is a question-by-question breakdown of the survey results:
Q1: "How long did you work with your previous employer?"
11or more 12
6 to 10 7 10 6
0 to 5 5
less than 1 year 1 to 2 years 2+ to 5 years 5+ to 10 years over 10 years
Because the categories represented various lengths of time, the standards of central tendency here were based on frequency or mode. Out of 40 respondents, 12 (or 30%) recorded a previous employment duration of over 10 years. 25% worked 1 to 2 years with their previous employer, 17.5% less than 1 year, 15% said 2 to 5 years, and 12.5% from 5 to 10 years.
Q2: "How long do you intend to work with your current employer?"
11 or more 16
6 to 10 9 10
0 to 5 1 4
less than 1 year 1 to 2 years 2+ to 5 years 5+ to 10 years over 10 years
Like question one, question two lends itself only to the mode as a measure of central tendency due to an unequal distribution of numerical values across the five categories. In this case, however, whereas the mode was 16 (again the number reflecting 10+ years), there was a discernible pattern of frequency: Number of responses increased with each proposed increase of time intending to work with the current employer: Whereas just 1 respondent declared an intention to leave within a year, 16 (or 40%) intended to stay on for over 10 years.
Question 3: "If you were to leave your current employer today, what condition would best describe your reason for leaving?" Potential responses to this question were divided up into eight nominal categories, along with a ninth ("Other") to account for unforeseen factors. Because the data were nominal, central tendency was indicated by mode or frequency. A frequency mode of fifteen accounts for the most popular response, "Opportunity for advancement elsewhere." Numbers of responses to each condition are summarized as follows:
15 - Opportunity for advancement elsewhere
8 - Changing career interests
4 - Dissatisfaction with management
4 - Inadequate pay
4 - Excessive stress
2 - Insufficient training or advancement opportunities
2 - Other
1 - Dissatisfaction with the job itself
Question 4: "What reason best describes why you left your previous employer?" The same nominal choices were presented in this question as in Question 3. Mode in this case was thirteen-for "other"-as seen in the following response breakdown:
13 - Other (Two respondents indicated "retirement from military" and the other 11 listed some variant of a company shutdown, bankruptcy, layoff, or reduction in work.)
7 - Opportunity for advancement elsewhere
5 - Dissatisfaction with management
4 - Dissatisfaction with the job itself
4 - Changing career interests
4 - Spouse or significant other transferred or moving
2 - Inadequate pay
1 - (No response)
Q5: "How satisfied are you with your job in terms of your responsibilities?"
11 or more 21
6 to 10
0 to 5 1 3 11 4
1 = very unsatisfied 2 = unsatisfied 3 = neither/nor 4 = satisfied 5 = very satisfied
Whereas the first two tables were analyzed for frequency, for the remaining questions an arbitrary numerical value of 1 to 5 was assigned for responses on a scale of "negative to positive," to determine the mean. For the above responses the mean is a very positive 4.2, to go along with an equally positive and heavily weighted mode of 4. Standard deviation equals the square root of the variance divided by the number of observations minus one (n-1), or 1.00.
Q6: "How would you rate your management staff in terms of attentiveness to issues...?"
11 or more 18
6 to 10 9 8
0 to 5 5 0
1 = very inattentive 2 = inattentive 3 = neither/nor 4 = attentive 5 = very attentive
Again assuming a numerical scale of 1 to 5 from positive to negative, the mean in this instance is 2.73, a little under the midpoint of the scale. Standard deviation comes to .870, less than 1 on a scale of 1 to 5.
Q7: "How satisfied are you with your employer's pay policy?"
11 or more 11 11 13
6 to 10
0 to 5 2 3
1 = very unsatisfied 2 = unsatisfied 3 = neither/nor 4 = satisfied 5 = very satisfied
Responses to this question were for the most part remarkably balanced and close to the center, yielding a mean of 3.1 and a standard deviation of 1.12.
Q8: "How satisfied are you with your employer's training and advancement (or promotion) opportunities?"
11 or more 13 17
6 to 10 8
0 to 5 1 1
1 = very unsatisfied 2 = unsatisfied 3 = neither/nor 4 = satisfied 5 = very satisfied
On the issue of training and advancement, the responses produced a mean of 2.88, and .81 for a standard deviation from the mean.
Q9: "Please rate the stress level of your job environment."
11 or more 20
6 to 10 7 12
0 to 5 0 1
1 = very high 2 = high 3 = about right 4 = low 5 = very low
The mean of perceived stress levels is 2.2-the lowest measure of central tendency in this study-with a variance measure of a .82 standard deviation.
Conclusions
Though little of decisive import can be directly inferred from this single study, the data do point to some tentative general conclusions. For example, a comparison of the results from questions 1 and 2 suggests that the store under examination here is in good shape from a standpoint of "intention to leave"-given that intention to leave is the single most reliable indicator of turnover, as some researchers affirm (Keaveney, 1992). Whereas a weighted 37% of employees surveyed expressed a definite openness to "opportunity for advancement elsewhere," they don't seem to be in any particular hurry to move on, since an equally weighted 40% of respondents expressed an intention to stay with the company more than 10 years. Another 47% indicated that they plan on sticking around at least 2 more years.
It may be that employee receptiveness to new opportunities has to do with a cluster of negative responses (4 each) pertaining to issues of "dissatisfaction with management," "inadequate pay" and "excessive stress." These answers were also addressed singularly, and arguably lend support to the notion that the three issues mentioned above have decreased a sense of commitment to the company in various employee circles. In addition, 13 or 32.5% of respondents expressed dissatisfaction with their current advancement opportunities.
To the question of where to rate management attentiveness, 5 participants answered "very
inattentive," and another 9 "inattentive," for a 35% negative response. Perceptions of the pay policy were more balanced, with 2 "very unsatisfied" and 11 "unsatisfied" countered by 3 denoting "very satisfied" and 13 "satisfied." The reported stress level was perhaps most telling of the three main negative categories: 20 respondents (50%) described the job stress level as "high," and 7 more thought it "very high." That makes for a 67% negative or critical response, and thus marks out stress as the area most in need of improvement.
This last conclusion is further supported by a number of apparently stress-related individual responses to the question of what to change to reduce turnover in the store: "Reduce stress"; "By relieving some of the stress"; "Scheduling is very inadequate"; "More help"; "Hiring more people to cover the departments"; "Having more coverage in departments"; "Fairer work distribution"; "Don't overwork an individual"; "Increase hours"; "More employees in department"; "More employees! Please!"; "Find supervisors that will work and not just give orders." Translated to percentage, 30% of respondents apparently had something to say about the heavy workload at this store and the toll it takes-not just on personal well being, but on commitments to job and career.
Such findings are seemingly significant, and point the way to further research efforts to isolate factors contributing to voluntary, dysfunctional turnover in the home improvement retail business-and perhaps the entire retail industry. Through such knowledge, retail managers will be better equipped to address and resolve the issues that lead to costly turnover in their stores.
References
Curtis, S., & Wright, D. (2001). Retaining employees - the fast track to commitment.
Management Research News, 24, 56-61. Retrieved January 16, 2004 from Proquest database.
Dess, G. G., & Shaw, J. D. (2001). Voluntary turnover, social capital, and organizational
performance. Academy of Management Review, 26, 446-57. Retrieved January 16, 2004 from Proquest database.
Gordon, J., & Lowe, B. (2002). Employee retention: Approaches for achieving performance
objectives. Journal of American Academy of Business, 1, 201-6. Retrieved January 16, 2004 from Proquest database.
Keaveney, S. (1992). An empirical investigation of dysfunctional organizational turnover among
chain and non-chain retail store buyers. Journal of Retailing, 68, 145-73. Retrieved January 16, 2004 from Proquest database.
Moorhead, G., & Griffin, R. (2001). Organizational behavior: Managing people and
organizations (6th. ed.). Boston: Houghton Mifflin.
Appendix A: Employee Satisfaction Survey
The purpose of this survey is to discover the main company-specific or internal factors that contribute to workers' voluntarily switching companies and/or careers, and to help determine practical steps employers can take to reduce turnover.
Your participation is strictly voluntary and all participant identities will remain strictly anonymous. All responses will be converted to electronic type to ensure anonymity. Results will then be submitted to my college research methods instructor and to the human resource department at [store name withheld] store #522 for review and analysis. (For [store name withheld] employees: Angie Saenz, our store human resource manager, has authorized employee participation in this project. Contact her if you have any concerns.)
Please indicate the answer that BEST represents what you think by placing a checkmark to the left of ONE of the choices. When finished, please fold in half so that your answers are not visible, and return to me. Thank you,
Don McIntosh
1. How long did you work with your previous employer?
__ a. less than 1 year
__ b. 1 year to 2 years
__ c. 2+ years to 5 years
__ d. 5+ years to 10 years
__ e. over 10 years
2. How long do you intend to work with your current employer?
__ a. less than 1 year
__ b. 1 year to 2 years
__ c. 2+ years to 5 years
__ d. 5+ years to 10 years
__ e. over 10 years
3. If you were to leave your current employer today, what condition would best describe your reason for leaving? Check the ONE BEST answer.
__ a. Dissatisfaction with the job itself (job design and responsibilities)
__ b. Dissatisfaction with management
__ c. Inadequate pay
__ d. Insufficient training or advancement opportunities
__ e. Excessive stress
__ f. Opportunity for advancement elsewhere
__ g. Spouse or significant other transferred or moving
__ h. Changing career interests
__ i. Other (please specify) __________________________
4. What reason best describes why you left your previous employer? Check the ONE BEST answer.
__ a. Dissatisfaction with the job itself (job design and responsibilities)
__ b. Dissatisfaction with management
__ c. Inadequate pay
__ d. Insufficient training or advancement opportunities
__ e. Excessive stress
__ f. Opportunity for advancement elsewhere
__ g. Spouse or significant other transferred or moving
__ h. Changing career interests
__ i. Other (please specify) ___________________________
5. How satisfied are you with your job in terms of your responsibilities?
__ a. Very satisfied
__ b. Satisfied
__ c. Neither satisfied nor unsatisfied.
__ d. Unsatisfied
__ e. Very unsatisfied
6. How would you rate your management staff in terms of attentiveness (listening and responding) to issues that are most important to you?
__ a. Very attentive
__ b. Attentive
__ c. Neither attentive nor inattentive
__ d. Inattentive
__ e. Very inattentive
7. How satisfied are you with your current employer's pay policy?
__ a. Very satisfied
__ b. Satisfied
__ c. Neither satisfied nor unsatisfied
__ d. Unsatisfied
__ e. Very unsatisfied
8. How satisfied are you with your employer's training and advancement (or promotion) opportunities?
__ a. Very satisfied
__ b. Satisfied
__ c. Neither satisfied nor unsatisfied.
__ d. Unsatisfied
__ e. Very unsatisfied
9. Please rate the stress level of your job environment:
__ a. Very high
__ b. High
__ c. About right
__ d. Low
__ e. Very low
10. In your own words, what (if anything) would you change about your current job to reduce turnover among employees? Please include any ideas in the space below:
That concludes the survey. Thanks for your participation.
Appendix B: Permission
Permission to conduct this survey was obtained verbally through the subject store's human resource manager, Angelica Saenz. For more information about the store in question or the survey, please feel free to contact me at [email protected].