Employee turnover is a major metric that companies use to ensure that their employees are staying around and that they are not losing too much money as a result of having to replace individuals. Employee turnover, is, in essence, the percentage of employees that leave in any given year for one reason or another. It includes those individuals who leave on their own volition in order to take other jobs and those individuals who leave because they are fired or let go. At the same, employee job satisfaction is a metric that many companies concern themselves with (Taormina & Gao 2014). This consists of the level of happiness and fulfillment that an employee has while working at the company. While this can be somewhat amorphous and difficult to calculate, job satisfaction is basically a conglomeration of the feelings that a person has about their job. It can be summed up by asking whether a person is happy with their position in a company and pleased when they come to work in the morning. It is more than just a passing emotion, of course. Employee turnover is, instead, a more permanent feeling.
Many theorists who have looked to improve the HR capability of companies have attempted to find the connection between these two things. Some theorists have suggested that in organizations of all sizes, job satisfaction has a negative correlation to employee turnover. By this, it means that when there is more job satisfaction, there is less employee turnover. The opposite is also true, as less job satisfaction among employees tends to lead to more turnover within the company. Understanding that this is a fact and phenomenon, many people in leadership positions within companies have tried to find good ways to improve job satisfaction so that there will be less turnover within organizations.
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The relationship between job satisfaction and turnover is relatively easy to understand in the context of how organisations work. Employees are human at their core. According to Maslow’s hierarchy of needs, which is one of the prevailing theories on organisational behaviour and individual behaviour, people will seek out their basic necessities first before climbing up a ladder, so to speak (Niemela & Kim 2014). They will first seek out their needs like water, food, clothing, and shelter. Until a person has gained these things, he or she cannot begin thinking about anything else. These might be referred to and understood as “lower order” needs. When one has those things covered, he or she might be able to move up to the next level of needs, including things like safety. They want shelter, food, and such, and beyond that, they want to feel safe (Jonas 2016). It is only when they have that that they can move on to love and esteem. At the top of the hierarchy is self actualization. This is when a person understands themselves and can seek to be the best versions of themselves, investing significantly in things outside of themselves. Job satisfaction plays into this in a key way. If a person is not satisfied with his or her job for one reason or another, then they will seek out other alternatives. It is in the nature of workers to want to stay where they are appreciated and move on in those situations where their needs are not being met (Ozguner & Ozguner 2014). There are many reasons that a person might not be satisfied in their given position. For instance, a person who is not being paid enough to support his or her family may move on to a new position or seek out a promotion with another company. Some people, though, have moved past the basic need for safety and other necessities, so they may be climbing up the ladder of needs. For these people, job satisfaction may have everything to do with the ability to make the world a better place or to make a real difference. If they are not getting this from their job, then they may be willing to move on to a new opportunity.
There is another way in which employee turnover and job satisfaction are related. Namely, when employees are satisfied, they tend to be more effective and work much harder. They will be better at their jobs and provide the company with more long-term value. Ultimately when people are working harder and doing a better job, they are less likely to be let go or fired. This will help to reduce employee turnover because companies can then keep the same people in place in order to have more continuity over time. Companies must keep employee satisfaction high because this tends to get those people motivated to work and tends to lead to the best long-term results among these individuals, as well. It is a trend that builds on itself, as good job satisfaction leads to lower turnover, which in turn can fuel even more job satisfaction because workers will then feel more secure in their positions.
The proposition in this instance is for the company to do more things to improve job satisfaction in order to keep the turnover rates as low as possible. Job satisfaction can be improved using a number of different methods. Namely, the company can provide better compensation and benefits. While there are certainly other methods that companies can use in order to effectively improve the satisfaction of their employees, many today are most worried about their pay. They have to pay the bills and support their families in increasingly expensive cities, so they tend to be happier when they are paid well. On top of that, being paid well signals to individuals that they are valued by the organisation. While pay is not always reflective of value, studies suggest that when employees are paid poorly, they will tend to take that as a reflection that the organisation does not care about their contributions.
In terms of implications, organisations must take the logical conclusion of this information and apply it in a way that works for them. Namely, employee turnover is an expensive issue. It costs big money because companies will often find themselves having to spend more money on recruiting while also spending more money on training and other things. There are severance packages to worry about, and aside from that, there are also instances where employee layoffs can bring on lawsuits. It is just a better idea not to have people leaving and coming all the time because this throws off the company in terms of its consistency. It also makes it hard for productivity to take place. The science behind employee turnover is not too difficult to understand. Namely, if companies want their employees to stay in their positions and to work well enough to not get fired, then companies have to provide those employees with a place where their needs are met and they feel secure. This can work differently for each individual employee. For some employees, it means providing them with more pay so they can handle their basic necessities. For others, it might mean ensuring that they have some way to improve the world with the job they are doing. As mentioned, what works for one person will not always work for the next. The goal is always to ensure that the company is doing what it can to leave people fulfilled so those people will not then leave the organisation.
- Jonas, J., 2016. Making practical use of Maslow’s Hierarchy of Needs theory to motivate employees: a case of Masvingo Polytechnic. Journal of Management & Administration, 2016(2), pp.105-117.
- Niemela, P. and Kim, S., 2014. Maslow’s Hierarchy of Needs. In Encyclopedia of Quality of Life and Well-Being Research (pp. 3843-3846). Springer Netherlands.
- Ozguner, Z., & Ozguner, M. (2014). A managerial point of view on the relationship between of Maslow’s hierarchy of needs and Herzberg’s dual factor theory. International Journal of Business and Social Science, 5(7).
- Taormina, R.J. and Gao, J.H., 2013. Maslow and the motivation hierarchy: Measuring satisfaction of the needs. The American journal of psychology, 126(2), pp.155-177.
