Optimal and Dysfunctional Turnover: Toward an Organizational Level Model

Abstract

Dysfunctional turnover is defined here as the level that produces a divergence between the organization's optimal balance of costs associated with turnover and the costs associated with retaining employees. Under this approach, the optimal level of aggregate turnover for most organizations will be (1) greater than zero and (2) variable across organizations, contingent on particular factors influencing retention costs and quit propensities. The model presented posits that individual, organizational, and environmental attributes influence individual quit propensities of employees and, hence, expected turnover rates for the organization.