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Employee turnover can be a vital concern for managers and has been viewed as inherently negative for organizational bottom-line (Miller, 2008). Most traditional literature suggests that voluntary employee turnover is detrimental and costly to an organization (Clark, 2008; Miller, 2008; O'Reiley, 2008). The impact of employee turnover is usually assessed by focusing on its effects on an organization's end performance. Typically, the evaluation of costs associated with employee turnover considers the following: advertising fees, recruiter fees, management's time for decision making, Human Resource's recruiting time, selection, training, overtime expenses from other employees needed to pick up slack, lost productivity and sales, decreased employee morale, and disgruntled customers (Babatunde and Laoye, 201 1). As a result, many employers invest large expenditures in employee retention programs in an effort to avoid the employee turnover costs.
Too often, organizations view involuntary and voluntary employee turnover equally. In some instances, turnover may influence profits and organizational goals positively. Depending on the nature of the separation, employee turnover may be categorized as functional or dysfunctional. Functional employee turnover is when lowperforming employees are replaced by higherperforming ones, and dysfunctional turnover is the reverse, causing the remaining employees to pick up the slack.
. . .the potential danger of a research practice that concentrates on the causes of employee turnover while neglecting its effects: such research is based on the assumption that employee turnover is an important organizational problem and should be dealt with accordingly. Hence, potential positive effects for organizations are overlooked (Glebbeek and Bax, 2004).
Nonetheless, this distinguishing factor suggests that organizational researchers should focus on the functionality of employee turnover and not only on the frequency of employee turnover.
Statement of the Problem
Although employee turnover has been viewed as a concern for an organization's bottom-line, it does not always affect an organization negatively. The nature of an existing employee's departure determines the type of employee turnover experienced. The current research does not examine the determinants of turnover, but rather explores the consequences. An organization may assess the effects of employee turnover by evaluating each employee separation and determining the performance required for each replacement to result in functional turnover. This study makes die assumption mat some turnover is desirable and functional for organizational effectiveness. Therefore, me problem...