Person-Organization Fit and Turnover Intention: The Mediating Role of Employee Engagement

Abstract

Introduction Employees constitute the most powerful resource for an organization to sustain long-term competitive advantage (Huselid, Jackson, & Schuler, 1997). Organizations that attract, develop, and retain top talent will thrive while those that do not will struggle to remain competitive (Holtom, Mitchell, Lee, & Inderrieden, 2005, p. 337). However, the issue of employee turnover, which is described as the unplanned loss of workers who voluntarily leave despite their employers' preference to keep them (Finnegan, Frank, & Taylor, 2004), exists in most organizations throughout the world (Memon, Salleh, Harun, Rashid, & Zurina Abu Bakar, 2014; Tariq, Ramzan, & Raiz, 2013). The U.S. Bureau of Statistics reported that an average of 25 million employees were involved in voluntary turnover, an increase of 6.1% from 2010 to 2011 (Hathaway, 2013). In Southeast Asia, Hewitt (2011) reported that the average employee turnover in the Philippines was 14.8%, followed by Malaysia (14.4%), Singapore (14.1%), Thailand (10.5%), and Indonesia (9.8%). These findings highlight that high voluntary turnover is an issue not only in the developed world, but also in developing countries including the Asian region. Hence, it is not surprising that this topic has attracted the interest of both academics and practitioners (Memon et al., 2014; Salleh, Nair, & Harun, 2012). Both academic researchers and practitioners agree that turnover is very costly since it requires an organization to invest a significant amount of its resources to recruit, interview and train new employees (Griffeth & Hom, 2001; Mobley, 1982). According to Fitz-enz (1997), an organization loses approximately $1 million (direct and indirect costs) to replace ten professional employees. Other consequences of high voluntary turnover include lower morale of the remaining employees (Rainey, 2003), loss of organizational memory (Huber, 1991), and low productivity (Johnson, 1995). For these reasons, it is essential that organizations understand the factors that influence turnover, which, consequently, can help to reduce such occurrences. Among other factors, the person-organization (P-O) fit has been seen as a predictor of employee turnover (Arthur, Bell, Villado, & Doverspike, 2006). Scholars in the field of human resource management and organizational behaviour have shown great interest in the P-O fit due to its negative relationship with turnover intention (Cable & DeRue, 2002; Hoffman & Woehr, 2006; Schneider, 1987; Verquer, Beehr, & Wagner, 2003) and several other individual and organizational level outcomes, such as organizational commitment, job satisfaction (Biswas & Bhatnagar, 2013; Kim, Aryee, Loi, & Kim, 2013; Resick, Baltes, & Shantz, 2007) organizational citizenship behaviour, organizational identification (Cable & DeRue, 2002) and job performance (Kim et al., 2013). Although studies have found negative relationships between the P-O fit and turnover intention, such links were not sufficiently substantiated (Kristof-Brown et al., 2005, Johnson, 2005; Verquer et al., 2003). One possible explanation for this weak meta-analytic relationship may be because past studies investigated the direct link between the P-O fit and turnover, thus confirming the need for an intermediary construct through which the process occurs. Furthermore, empirical evidence has indicated that a higher level of employee engagement (EE) reduces employee turnover (Maslach, Schaufeli, & Leiter, 2001; Saks, 2006; Schaufeli & Bakker, 2004). EE has been an area of interest among practitioners (Saks, 2006), particularly in understanding its influencing factors. Notably, although EE has been relatively less discussed in the academic field (Saks, 2006), numerous studies have explored EE as a mediator between a number of antecedents and outcome variables (e.g., Alfes, Shantz, Truss, & Soane, 2013; Andrew & Sofian, 2012; Saks, 2006; Schaufeli & Bakker, 2004). …