The Impact of Employee Engagement Factors and Job Satisfaction on Turnover Intent
“The challenge today is
not just retaining talented people, but fully engaging them, capturing their
minds and hearts at each stage of their work lives” (Lockwood, 2007)
While healthy turnover in
an organization can be positive, refreshing, and helpful in introducing new
ideas and techniques that can move the organization to greater levels of
success, turnover among highly-productive, key employees is costly (Hellman, 2007).
According to a number of researchers, typical turnover costs include exit costs
(e.g., administrative time and pay for leave not taken), temporary replacement
costs (e.g., agency fees and training); recruitment and selection costs (e.g.,
advertising costs, agency fees, lost time); decreased morale and productivity
among retained workers; loss of future key talent (i.e., intellectual capital
including knowledge, skills, and experience); and sharing of organizational
processes, technology, and relationships (Fitz-enz, 2001).
Since, the long-term
retention of a highly productive workforce is coveted, and a goal of human
resources is to attract and maintain highly productive employees, it is
imperative for human resources to better understand how to maximize the
retention of productive employees.
The concept of employee
engagement has appeared fairly recently in the literature. Because of its
relative infancy, there is a lack of information about the relationship between
known employee engagement factors (Buckingham et al., 1999), job satisfaction,
and turnover intent. Not only is there a lack of information, there are
discrepancies between studies that cloud our understanding of the relationships
of the aforementioned variables. Because of this lack of information, there
exist missed opportunities for growth, development, and change that could
essentially affect the performance of an organization (Nassazi, A. 2013).
Figure 1. Proposed Model Detailing the Relationships between Employee Engagement Factors, Job Satisfaction, and Intent to Leave.
Source
– (Lynn, M., & Michael, L. 2008)
Turnover Intent
Turnover among businesses
is widespread (Bernthal & Wellins, 2001): nearly 1/3 of workers expect to
leave their job within the next year and 20% of them estimate the likelihood of
them leaving was greater than 50%. Turnover is likely to increase, according to
Bernthal et al. (2001). This is problematic due to the fact that turnover is
costly for an organization. Unfortunately, the problem of turnover is not
always addressed effectively even though human resource professionals consider
it problematic. (Iqbal, A. 2018)
Video
1 – Employee turnover
Source : (Gregg Learning, 2018)
Reference:
Aidah Nassazi, 2013
Business Economics and Tourism effects of trainingon employee performance.
Evidence from Uganda Vaasan Ammattikorkeakoulu university of applied sciences International
Business
Bernthal, P. R., &
Wellins, R. S. (2000). Retaining talent: A benchmarking study. Development
Dimensions International. (DDI).Retrieved February 15, 2007, from
www.ddiworld.com/pdf/cpgn60.pdf.2000
Buckingham, M., &
Coffman, C. (1999). First, break all the rules. New York: Simon & Schuster.
Fitz-enz, J. (2001). How
to measure human resources management. NY: McGraw Hill
Hellman, C. M. (1997).
Job satisfaction and intent to leave. The Journal of Social Psychology, 137(6),
677-689.
Lockwood, N. R. (2007).
Leveraging employee engagement for competitive advantage: HR’s strategic role.
2007 SHRM Research Quarterly. Retrieved March 30, 2007, from www.shrm.org
The latest meta-analysis report published by Gallup highlights, engagement has impact on the employee turnover rate. They have categorized organizations with high and low turnover. The turnover rates decreased by 18 % , if the organization had a high turnover annually and 43% if it’s was low annually ( Gallup, 2020).
ReplyDeleteThank you for your comment over my blog. Yes, I agree that engagement has impact on the employee turnover rate. Having a high turnover rate is obviously very expensive, but there are many reasons why employees leave their jobs. Sometimes, life events are the contributing factor – an employee moves across the country, decides to go back to school, takes time away from work to raise a family – and turnover for these reasons can never be eliminated. But the majority of the reasons that people resign are entirely under control of the employer. Contrary to what some might think - salary does not buy loyalty. The most commonly cited reasons for leaving a job are related to engagement (Vasilakeris, 2017)
DeleteA proposed relationship between the antecedent-employee engagement factors—and the outcome variable turnover intent mediated by job satisfaction was explored in the current literature review. As the theoretical basis for the study, Kahn's Personal Involvement Theory, Equity Theory, and Herzberg's Two-Factor Theory of Work Satisfaction were used. (Berry & Morris, 2008)
ReplyDeleteThanks for the comments. Yes, I agree with your quote. The term employee engagement relates to the level of an employee's commitment and connection to an organization. Employee engagement has emerged as a critical driver of business success in today's competitive marketplace. High levels of engagement promote retention of talent, foster customer loyalty and improve organizational performance and stakeholder value (SHRM, 2017)
DeleteChilds (2015), defined employee turnover as “The rate at which an employee is hired and then replaced with a new employee due to voluntary or involuntary discharge” .The problems that occurred due to the high employee turnover are increasing workload and work stress to the existing employees, cost of recruiting, training and development of new employees, moral and group work of the existing employees will get reduce (Thomas, 2013). But consider that Zhang (2016) stated that there are both positive and negative consequences of employee turnover. On the positive hand, can recruit the new blood to the organization. On the negative hand, the cost of leaving, recruitment and training will increase and productivity can be loss.
ReplyDeleteAccording to the Pfeffer and Sutton (2006), Employee turnover is a major managerial concern in work organizations. And Employee turnover will affect the service quality of the organization (Lin and Chang 2005).
ReplyDeleteThank you Rumesh for your comment on my post. I would like mention with increased number of employment opportunities, employers are increasingly finding it difficult to control employee turnover. Nonetheless, positive psychologists argue that one of the ways to face this challenge is by understanding the positive factors such as, work engagement and personal resources that negatively affect employees’ turnover intention (Gupta, 2017).
DeleteAccording to Pawar and Chakravarthy’s (2014) employees in an organization resign for so many reasons like career progression, issues with their staff mainly being the issues with their direct leaders or managers. This could be due to lack of proper feedback and appreciation to the employees which will have a major impact on them engaging with the team and organization (Branham, 2005).
ReplyDeleteI have noted your comments with many thanks. If you hire people just because they can do a job, they’ll work for your money but if you hire people who believe what you believe, they’ll work for you with blood and sweat and tears (Sinek, 2018)
DeleteAgreed, As per the Penna research report (2007) describe, The meaning of work has the potential to become a valuable way to bring employers and employees closer together, which helps employees to experience community awareness, become their own space and make opportunities to contribute, and they find purpose. Employees want to work in organizations that they think work makes sense.
ReplyDeleteThank you Janaka for your comments on my blog. I would further like to mention that employee engagement has emerged as a popular organizational concept in recent years. It is the level of commitment and involvement an employee has towards their organization and its values and beliefs. An engaged employee is aware of business context, and works with colleagues to improve performance within the job for the benefit of the organization. Employee engagement initiative has a direct impact on the organization's productivity. All organizations want their employees to be engaged in their work. Employee engagement is linked to customer satisfaction which is linked to an organization's financial success (Patro, 2013).
DeleteMost often employee engagement has been defined as emotional and intellectual commitment to the organisation (Baumruk, 2004) or the amount of discretionary effort exhibited by employees in their job (Frank, et al., 2004).
ReplyDeleteThank you Kelum for your comment on my blog. I would like to add that the employee engagement is a workplace approach resulting in the right conditions for all members of an organization to give of their best each day, committed to their organization’s goals and values, with an enhanced sense of their own well-being (Engage for Success, 2020 ).
DeleteAdding more to your blog, Job satisfaction, organizational commitment and administrative leadership has been found to be significant predictors of turnover intention (Reio & Segredo, 2013). A dissatisfied employee has the tendency to evaluate the cost of quitting and searching for alternative jobs. To find a new job means starting over and could involve significant risks that a worker might be hesitant to take (Halbesleben & Wheeler, 2008). Reio and Segredo (2013) found that workers who adapted well to the work environment, connecting with mentors, were more committed to the organization; this resulted in decreased intent to leave the profession.
ReplyDeleteThe failing global economy has created a huge shift in the way business takes place. Employee engagement matters to both the employee as well as the organization. Employees can utilize contract agreement provisions to impede the attainment of the organizational goals and objectives. Management’s capability to leverage employee engagement strategies is essential in an organization. (McCuiston & DeLucenay, 2010)
ReplyDeleteThank you Thusjanthan for your comments on my blog post. I agree with your points. I also would like to add that employee engagement has emerged as a critical
Deletedriver of business success in today’s competitive marketplace. Further, employee engagement can be a deciding factor in organizational success. Not only does engagement have the potential to significantly affect employee retention, productivity and loyalty, it is also a key link to customer satisfaction, company reputation and overall stakeholder value. Thus, to gain a competitive edge, organizations are turning to HR to set the agenda for employee engagement and commitment (Lockwood, 2007).
What will happen to an organization if its employees are disengaged? Employees who are not engaged are likely to be spinning (wasting their effort and talent on tasks that may not matter much), settling (certainly do not show full commitment, not dissatisfied enough to make a break) and splitting (they are not sticking around for things to change in their organization), have far more misgivings about their organization in terms of performance measures such as customer satisfaction (White, 2006).
ReplyDeleteThank you Kanishka for your comments on my post. I would like to further add that it was found that many identified factors were predictors of employee engagement, however, the variables that had major impact were working environment and team and co-worker relationship. Employee engagement had significant impact on employee performance (Anitha, 2014).
DeleteRobinson et al. (2004) define employee engagement as “a positive attitude held by the employee towards the organization and its value. An engaged employee is aware of business context, and works with colleagues to improve performance within the job for the benefit of the organization. The organization must work to develop and nurture engagement, which requires a two-way relationship between employer and employee.” This verdict and definition forwarded by Institute of Employment Studies gives a clear insight that employee engagement is the result of two-way relationship between employer and employee pointing out that there are things to be done by both sides. Furthermore, Fernandez (2007) shows the distinction between job satisfaction, the well-known construct in management, and engagement contending that employee satisfaction is not the same as employee engagement and since managers can not rely on employee satisfaction to help retain the best and the brightest, employee engagement becomes a critical concept. Other researchers take job satisfaction as a part of engagement, but it can merely reflect a superficial, transactional relationship that is only as good as the organization’s last round of perks and bonuses; Engagement is about passion and commitment-the willingness to invest oneself and expand one’s discretionary effort to help the employer succeed, which is beyond simple satisfaction with the employment arrangement or basic loyalty to the employer (BlessingWhite, 2008; Erickson, 2005; Macey and Schnieder ,2008). Therefore, the full engagement equation is obtained by aligning maximum job satisfaction and maximum job contribution. Stephen Young, the executive director of Towers Perrin, also distinguishes between job satisfaction and engagement contending that only engagement (not satisfaction) is the strongest predictor of organizational performance (Human Resources, 2007).
ReplyDeleteThank you Surendra for your comments on by blog. I would like to add further that employee engagement is an important issue in management theory and practice. However, there are still major differences in the concept, theory, influencing factors and outcomes of employee engagement, and there is still no authoritative standard. This paper attempts to review and summarize previous research results on employee engagement. Two kinds of definitions of employee engagement are identified- employee engagement as a multi-faceted construct (cognition, emotions and behaviors) and as a unitary construct. A positive state of mind, a dedicated willingness, the opposite of burnout (Bunchapattanasakda, 2019)
DeleteBoth job satisfaction and motivation impacted employee job performance. So, Motivation and job satisfaction are both variables in determining why employees intend to leave their organization.
ReplyDeleteTherefore, If leaders in the organization could change the work environment or environmental conditions, turnover could be decreased.(Calecas,K.J.2019)
(Seigts et al.2006) summarized the literature on employee engagement stating that engagement factors deal with connection, career advancement, clarity in communication, conveyance of expectations, congratulations or recognition, contributions, control over own job, collaboration between employees, credibility in leaders, and confidence in the company
ReplyDeleteDigital employee engagement platform - SOS helped organizations to build a digital platform to help the corporate employees be more productive through positive engagement and brand connection.
ReplyDelete