High Employee Turnover Rates Bear An Overall Impact On Organizational Performance

809 Words Sep 23rd, 2015 4 Pages
Introduction
High employee turnover rates bear an overall impact on organizational performance. More specifically, the costs of turnover will impact the company’s productivity. The cost of replacing employees can exceed 100% of the annual salary for the open position (Cascio, 2006). There are two types of costs associated with managing turnover, Separation costs and Replacement costs (Allen, Bryant and Vardaman, 2010). When employees voluntarily resign the organization acquires loss time and money to separate from the former employee. These costs include recruiting, selecting and training a suitable replacement. The relationship between turnover rate and performance are inverse. As collective turnover increases, an organizations productivity will decrease (Hausknecht and Trevor’s 2011). Developing mechanisms to offset the desire for employee’s to resign could mitigate the risk of company’s falling short on productivity, and incurring those costs that affect the bottom line.
Problem Statement
The cost-based perception assesses the impact on direct and indirect costs associated with collective turnover. On the basis of the evidence currently available by Allen et al. (2010), these cost are factors that affect organizational performance and ultimately productivity. According to the U. S. Bureau of Labor and Statistics (2014), there were over 5.7 million voluntary separations in the United States in the year of 2014. This study advances our understanding and knowledge to…
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