The following is a summary of the research and practice implications from: Becker, W.J., & Cropanzano, R. (2011). Dynamic aspects of voluntary turnover: An integrated approach to curvilinearity in the performance-turnover relationship. Journal of Applied Psychology, 96(2), 233-246.

If you are like most managers, you probably view voluntary employee turnover as a costly and undesirable occurrence.  In many instances, this is the case.  However, some types of voluntary turnover can actually be good for your company.  When the employees that leave an organization are poor performers, this may be better for the company than if the employees had stayed.  This is known as functional turnover, and is desirable.

Influences on Employee Turnover

There are numerous factors that influence voluntary employee turnover including performance level and performance ratings.

• Performance Level. As touched on above, performance level is one factor that can influence employee turnover.  The lowest performing employees are the most likely employees to turnover.  They are the highest risk, which as mentioned, is not necessarily a bad thing for an organization and a manager should not be as concerned about this type.  The second most common type of employee turnover is among the highest performers in an organization.  The best performing employees are also the most hurtful for the organization to lose. Managers should work to retain these employees.
• Performance Ratings. These are dynamic in that they are constantly changing for better or worse as an employee’s performance changes.  When these ratings go down for employees, they are more likely to turnover and leave an organization.  Poor performers are even more likely than high performers to turnover after a downward change in performance.  In addition, negative performance ratings will have a greater impact on turnover than positive performance ratings.  In other words, positive performance ratings from a manager will not stop turnover in low performers.  High performers are less likely to be affected by short-term changes in performance whether the ratings have decreased or increased from previous ratings.

What Can be done to Help?

Merit-based, or performance-based, pay may lessen the effects of voluntary turnover in relation to performance level and performance ratings.  High performers are less likely to turnover when they are paid based on performance.  As a manager, you should make sure that an employee is rightfully rewarded for their efforts.  This effect is not found among low performers; the method used to pay a low performer does not influence the turnover rate.

Practical Implications

Managers should provide a fair but rigorous performance rating system that holds employees to high standards.  This will help to get rid of any low performers naturally.  High performers should be adequately rewarded for their work as well because this will reduce turnover in high performers.  Without the right compensation for these employees, an organization will risk losing its move valuable assests.

Interpretation by:

Ashley Niemczyk

DeGarmo Group

 DeGarmo Group announced today that Anthony Adorno will be facilitating an HR.com webcast titled “Reducing Employee Turnover in Front-Line Jobs“. The session will be held on October 20th, 2011 from 1:00 – 2:00 pm ET. Provided below is a description of the session, as well as registration information.

 Session Overview

Ever hire an employee with all the right skills for the job, only to watch that person walk out the door for good three weeks later? Where did you go wrong? What did you miss?

Most organizations often overlook the importance of measuring an applicant’s work tolerance as part of the talent acquisition process. Unfortunately, it doesn’t matter if the applicant has the skills to do the work if they can’t tolerate the demands of the job!

During this session we’ll discuss the concept of work tolerance as applied to jobs in several settings including retail sales and customer service. We’ll talk about the process of analyzing jobs to discover their underlying work tolerance demands, as well as approaches for using work tolerance information to improve the talent acquisition process to reduce employee turnover, and increase levels of job satisfaction.

Finally, we’ll share the results of research using work tolerance measures in several organizations representing industries such as telecommunications and financial services, but the concepts learned during this session can apply to any job, in every organization.

What will participants learn?
1) The difference between the work tolerance and skill demands of jobs
2) How to analyze jobs to determine their underlying work tolerance demands
3) Methods for using work tolerance demands for improving talent acquisition
4) The impact of work tolerance characteristics for reducing employee turnover in front-line jobs

Who should attend?
1) Recruiters, Managers, Directors, VPs, etc., responsible for HR, Staffing, and Talent Acquisition.
2) Those interested in learning about the impact of work tolerance on organizational success.
3) Business leaders

Registration Information

To register for the event, please visit: http://www.hr.com/stories/1317068692478

The following a summary of the research and practice implications from: Swider, B. W., Boswell, W. R., & Zimmerman, R. D. (2011). Examining the job search–turnover relationship: The role of embeddedness, job satisfaction, and available alternatives. Journal of Applied Psychology, 96(2), 432-441.

Have you ever searched for available jobs, even though you were employed at the time?  If so, you are not alone – employed individuals are currently the largest population of job seekers. With so many employees perusing the job market, managers may find it is to their advantage to know that certain influential factors could sway their employees to stay or leave. Specifically, managers may be interested to learn that job satisfaction, the availability of job alternatives, and job investment (i.e. embeddedness), affect employee turnover decisions.

The Job Search – Turnover Relationship

Job searching, or the active pursuit of job opportunities in other organizations, is a precursor to the majority of voluntary employee turnovers.  Despite this trend, all job searchers are not necessarily job leavers and all job leavers are not necessarily job searchers. Research has shown that an employee’s job searching behavior is not enough to accurately predict whether he or she quits. However, managers should keep in mind that job searching gives employees the opportunity to compare their current job against an unknown number of alternative opportunities.

Deciding Factors: To Stay or to Leave

As a manager, you may wonder –  if many of my employees are actively looking at available job opportunities, how can I prevent them from leaving for another offer?

In order to retain job searching employees, managers should be aware of what factors affect their decisions to stay with their current job, or quit and pursue another opportunity. The following are three factors that affect employee’s decisions to stay or leave:

• Job Satisfaction: Employees who are less satisfied with their current working conditions are more likely to accept an alternative opportunity.  One reason for this stems from the intention behind the job search.  Dissatisfied employees are more likely to job search with the intention of finding a replacement job, whereas their satisfied peers are more likely to be testing the market, seeking leverage in their current employment, etc.  In addition, dissatisfied job searchers may accept lower quality job offers than their satisfied peers. In contrast, satisfied employees require substantially better offers before they are willing to leave their current organization.
• Job Embeddedness: Job embeddedness is the degree to which an employee feels unable or unwilling to leave his or her job.  This concept is a combination of three sub-components regarding the employee’s: 1) formal and informal ties with the organization, 2) compatibility with the organization, and 3) cost or sacrifice that would be forfeited by leaving the organization. As a job searcher’s level of job embeddedness increases, the risk of turnover decreases.  In other words, job searchers who have fostered ties with their organization, consider themselves to fit in well with their job and organizational culture, and consider the cost of leaving to be great, are less likely to actually accept a suitable alternative.
• Job Alternatives: A third factor that affects job searchers is the availability of suitable alternative positions. In general, the probability of turnover increases when a job searcher has multiple alternatives to choose from. With that in mind, the employees who are highly marketable, or who have a large number of potential alternatives, are at the greatest risk for turnover.

Practical Implications

It is important for employers and HR managers to foster positive work attitudes and embeddedness in order to retain employees. Workplace initiatives, such as job enrichment and providing a supportive work climate, are proven tactics for increasing job satisfaction.  Job embeddedness can be promoted within the organization ( e.g. work teams and committees) or within the community (e.g. facilitate home ownership).

HR managers may also want to target retention efforts for the high risk individuals, or those who are less satisfied, not embedded in their jobs, and have other alternatives available.  To do so, organizations may benefit from assessing employee work attitudes, employee links to the organization and community, and occupation-level labor trends.

Interpretation by:

Kelly Whalen

DeGarmo Group

The following is a summary of the research and practice implications from: Nyberg, A. (2010). Retaining your high performers: Moderators of the performance-job satisfaction-voluntary turnover relationship. Journal of Applied Psychology, 95(3), 440-453.

Voluntary turnover is problematic on any level, however, not all voluntary turnover has the same organizational impact. Specifically, high performing employees are especially costly to lose.

Not only does turnover of high performers lead to costs due to lost productivity, recruiting, and training, but also to losses of overall organizational knowledge and leadership.

Turnover Risk of High Performers

High performers can be viewed as either more or less likely to leave an organization voluntarily. According to one belief, high performers are more likely to stay at an organization, given that there is a clear line drawn from performance to rewards. On the other hand, high performers are more likely to leave when they feel under-rewarded or when there are greater external opportunities.

Some additional factors that change the performance-voluntary turnover relationship are listed below. Factors that impact high performers’ likeliness to turnover include:

• Comparable employees being paid the same amount (or more) for less work, which increases high performers’ likeliness to turnover.
• High performers who perceive that they are being equitably paid for their efforts in comparison to their co-workers, are more likely to stay.

Keeping this in mind, managers must take extra steps to monitor and reduce the risk of high performer turnover.

Performance-Voluntary Turnover Relationship

Both pay growth (the rate that an employee’s total pay changes) and the unemployment rate interact with performance to influence the performance-voluntary turnover relationship, such that high performance leads to low voluntary turnover (and vice versa). Pay growth is important because organizations often use it as a tool to enhance retention. Additionally, on a larger scope, salary growth and bonuses have been found to influence the performance-voluntary turnover relationship.

To combat the likelihood that a low unemployment rate will lead to high performers leaving, it is crucial to keep pay growth high. Moreover, these factors work independently of employee job satisfaction influences.

Practical Implications

Compared to low performer turnover, high performer turnover can be excessively detrimental to organizational success. The unemployment rate and pay growth findings together show that managers should focus extra attention on higher performing employees when the unemployment rate is low, because if pay growth is also slowed, high performers become more likely to leave.

Ultimately, supervisors and upper level managers should keep a few things in mind:

• Due to the differences across performance levels in employee reactions to various organizational environment factors, such as a close relationship between performance and rewards, managers may benefit from tailoring policies toward specific performance groups to achieve desired performance outcomes for each employee.
• Pay growth influences turnover regardless of job satisfaction. Therefore, managers should pay close attention to pay growth.
• Even though current employment markets have produced few job opportunities, managers should remain vigilant about retaining their better performers, who may still be able to find alternative employment.

Interpretation by:

Kandace Waddy

DeGarmo Group

The following is a summary of the research and practice implications from: Barrick, M. R., & Zimmerman, R. D. (2009). Hiring for retention and performance. Human Resource Management, 48(2), 183-206.

As the poor economy and the associated decrease in employee raises and bonuses make it more difficult to retain high-performing employees, organizations need to make pre-hire determinations of which candidates are most likely to stay with the organization. Finding indicators for both performance and turnover enables organizations to use fewer resources when selecting applicants. But, based on the idea that past behavior is the best indicator of future behavior, what are the most useful predictors for high performance and low turnover?

Pre-hire Predictors

Are pre-hire predictors of turnover also effective indicators of work performance?

Several indicators, such as biodata (biographical data) and pre-hire attitudes, have been explored for the purpose of answering that very question. In particular, three types of information are especially strong indicators of job performance and turnover.

• Biodata- predictors that represent pre-hire embeddedness in the organization (employee referral; number of friends and family) and habitual commitment (tenure in prior job; number of jobs in last five years)
• Pre-hire attitudes- includes the applicant’s self-confidence and confidence with decisions, as well as the applicant’s desire for a job and pre-hire intent to quit
• Personality traits- Conscientiousness (being dependable and reliable) and Emotional Stability (ex. Individuals who have low emotional stability tend to have negative perceptions of themselves and their environment.)

Turnover Decisions and Job Performance

Some notable indicators of which employees are likely to remain working for a company six months after hire include: pre-hire embeddedness, habitual commitment, personal confidence, motivation for employment, conscientiousness, and emotional stability. Further, beyond the period of six months post hire, up to two years later, the remaining two indicators for voluntary, avoidable turnover are conscientiousness and emotional stability.

The number of jobs held over the previous five years was a better indicator of early turnover, whereas tenure on the most recent job was more predictive of early job performance.

The good news is that most turnover decisions are “functional,” meaning that those employees who tend to stay in an organization tend to be the better performers.

Practical Implications

Learning how to do the job (conscientiousness), meeting the “right” people from whom to learn about the organization (embeddeness), and figuring out the power structure of the firm and the organization’s goals and values are important to employee success and lead to lower turnover during the early stages of an employee’s adjustment to an organization.

While so many of the factors listed above serve as suitable indicators for high performance and low voluntary, avoidable turnover, hiring managers should mainly consider them when hiring for a short-term or seasonal position, due to the fact that most of the indicators are useful for six months post-hire.

Ultimately, personality (conscientiousness and emotional stability) is a useful indicator of voluntary, avoidable turnover up to two years after hire. Further, a personality assessment enhances the usefulness of biodata when the two are used together. Hiring managers should note that with the exception of personality, the importance of all other predictors weakens over time.

Interpretation by:

Kandace Waddy

DeGarmo Group

Bloomington, IL – DeGarmo Group (www.degarmogroup.com), is  proud to report that US Cellular (www.uscellular.com) was recognized as a J.D. Power 2011 Customer Service Champion—one of only 40 companies to have earned this distinction this year.

US Cellular uses DeGarmo Group’s talent acquisition systems to select employees who work in their front-line, customer-facing roles such as Customer Service Representatives and Retail Sales Associates, among others.

“We’re happy to see US Cellular recognized with such a prestigious award. We’ve worked very closely with their Talent Acquisition team over the years to ensure that our assessment solutions help to select the best people to fill those critical front-line positions” stated Anthony Adorno, Chief Operating Officer for DeGarmo Group.

To qualify for inclusion on this elite list, companies must not only excel within their own industries, but also must stand out among leading brands in 20 major industries evaluated by J.D. Power. Five key customer “touch points” measured included people, presentation, process, product and price.

To identify the J.D. Power 2011 Customer Service Champions, J.D. Power evaluated more than 800 brands. Companies were identified based on customer feedback, opinions, and perceptions gathered primarily from J.D. Power’s syndicated research as well as additional, supplemental research. This group of 40 represents the highest-performing companies that deliver service excellence to U.S. customers—both within their respective industries and across all industries measured.

According to Alan D. Ferber, executive vice president of operations for U.S. Cellular, “We are especially honored to be named a Customer Service Champion because it’s based on the opinion of our customers. They deserve excellent customer service, and we will continue to work hard to deliver it.”

About DeGarmo Group

DeGarmo Group is a leading provider of web-based assessment and training services to support talent acquisition and employee development processes. We employ a staff with expertise in Industrial and Organizational psychology that regularly contributes to, and draws upon, the latest scientific research to deliver innovative and compelling solutions for our clients.

About U.S. Cellular

U.S. Cellular is committed to fixing wireless one project at a time and recently unveiled The Belief Project, an array of industry-leading innovations designed to elevate the customer experience. The Chicago-based carrier provides the best cell phone service in the country according to survey results released by Consumer Reports, which found that wireless customers are more satisfied with U.S. Cellular than every other major wireless company. U.S. Cellular has the highest call quality and network satisfaction of any national carrier and was also named one of Forbes Magazine’s 2010 “Most Trustworthy Companies.” The Belief Project complements U.S. Cellular’s growing catalog of cutting-edge phones that are all backed by its high-speed nationwide network.

CASE STUDY 

The following is a case study examination of the Customer Serivce and Collections Fit Index assessments based on employee turnover data supplied by a large client organization.

The Company

 The company is one of the largest providers of call center management and collection agency services in the United States.

The Challenge

The project was organized to study the effectiveness of DeGarmo Group’s assessment solutions across locations and lines of business at the client organization.  The company suffered from higher than acceptable rates of voluntary employee turnover.

Client leadership was particularly interested in the impact of the solutions across locations that have a more substantial impact on the business operation. To that end, DeGarmo Group collected data using an experimental design which allowed for a direct comparison of the accuracy of employment decisions with and without assessment information.

Assessment Strategy

DeGarmo Group implemented the Customer Service Fit Index (CSFI) and Collections Fit Index (CFI) assessments to identify and screen out turnover-prone job applicants during the talent acquisition process.

In contrast to typical pre-employment assessments that measure job skills, the Fit Index System® focuses on job-related applicant differences in work tolerance and personality characteristics.

Study Design

For both Collections and Customer Service jobs, a group of applicants was hired without completing the appropriate Fit Index assessment. Separately, a group of applicants was hired after completing the appropriate Fit Index assessment, but the test results were not made available, and thus did not influence the hiring decision.

Assessment and criterion data for the case study was collected from 418 people from several call center locations. Specifically, there were 223 (53%) cases of data for the Customer Service Fit Index (CSFI), and 195 (47%) cases of data for the Collections Fit Index. Additionally, 396 applicants served as part of the control group and did not participate in the assessment process.

Comparison of results for the assessment versus control groups would provide insight regarding the effectiveness of the Fit Index System for the client organization. The success rate for the assessment process will be indexed as a percentage difference between turnover rates for both the assessment and control groups. For example, a success rate of 15% would indicate that turnover was 15% lower for applicants who passed a Fit Index Assessment, versus those who were in the control group.

Assessment Impact

Data was used where direct comparisons across locations or accounts of interest could be made, and where the proper assessment was administered for the target position.

For the Customer Service Fit Index (CSFI), results indicate that applicants with a passing outcome have a 26% greater success rate than failing applicants.  Two-thirds (66%) of all control group applicants (i.e., who did not participate in the assessment process) terminated employment. The success rate for applicants who passed the Customer Service Fit Index was 26% greater than for applicants who were not tested.

Applicants who passed the Customer Service Fit Index were much more likely to remain on the job than the control group for every account operated by the client organization. The impact of the CSFI was greatest for a telecommunications account, which also was the largest account group in the biggest contact center included in the study.  Specifically, the success rate was 31% higher for those applicants who passed the CSFI, than for the control group.

For Collections results indicate that applicants with a passing outcome have a 17% greater success rate than failing applicants. The CFI outperformed the control group in both collections contact centers by an average of 17%. That is, turnover was 17% lower among those who passed the CFI than for those who were in the control group.

Return on Investment

The information below provides a perspective on the relative utility of the Fit Index System as part of this case study. It is important to note that while this ROI analysis examines direct hire costs, there are far more costs to the business as a result of voluntary employee turnover (lost productivity, business continuity, etc.). Therefore, any results reported below should be viewed as very conservative underestimates of total utility.

Client leadership estimated that the average cost per hire for entry-level call center employees is $800 per person. This estimated figure is far below the industry average for similar positions.

Based on these figures, the estimated annual ROI for the Fit Index System in 2010, using a 3:1 selection ratio is $764,000 (saved an additional 955 hires).

Since the system was implemented in 2007, this client organization assessed a total of 55,764 people with the Fit Index System. Using the same process for extrapolating savings, at a selection ratio of 3:1 during that time, savings is estimated to be $3,297,600.

The case study results for the Fit Index System^® (FIS) are quite favorable by all technical, professional, and legal standards.

Contact Information

Contact DeGarmo Group for more information on this case study or for information on the Fit Index or Fit Interview Systems using the information provided below.

The DeGarmo Group, Inc.
101 N. Main Street
Bloomington, IL 61701
(866) 433-4276
sales@degarmogroup.com
www.degamogroup.com

The following article is a summary of the research and practice implications from:

A honeymoon is often thought of as a time of quintessential happiness. Whereas, the term hangover may conjure bad memories of overindulgence followed by an extreme “let down.” Surprisingly, in the organizational context, these two experiences can act as a metaphor to explain job satisfaction as it relates to new hires.

How Do Honeymoons and Hangovers Occur?

When examining job satisfaction in relation to new hires in an organization these terms are extremely relevant.

• Honeymoon effect. Often a period of heightened satisfaction associated with a new position that occurs because the new hire has high expectations of the position. The employee may be trying to “put her best foot forward” with a positive attitude, or may be excited about new experiences, people, and challenges, making her content with the employment situation.
• Hangover effect. After roughly six months, the employee has settled into the position, and everything is no longer new and exciting. The extreme satisfaction experienced during the honeymoon period begins to dissipate and the employee may reach a more “stable” satisfaction level.

Unfortunately, individuals who experience extreme satisfaction during the honeymoon period are often those who will experience a significant decrease in satisfaction during their hangover period – “the stronger the honeymoon, the stronger the hangover.”

Practical Implications

Because satisfaction can play an important role in motivation, behavior and turnover intentions, organizations should make all employees aware of this phenomenon. Organizations can:

• Identify “risky periods” when employees are most susceptible to experiencing the hangover effect and work to mitigate this effect. Offering employees new opportunities or providing additional support and guidance can accomplish this.
• Educate new hires on the possibility of experiencing these effects during the on-boarding process. Understanding these feelings are typical can help to lessen the extreme “let down” employees may experience, and give an accurate preview of the organization and position.
• Educate supervisors to allow them to be aware of times when employees may experience heightened or decreased satisfaction. This will allow them to make extra effort to engage and encourage employees during these times.

Overall, organizations should not be concerned if the honeymoon-hangover satisfaction pattern is displayed in the organization. Simply understanding and acknowledging this phenomenon will be useful in overcoming any challenges that may arise.

Interpretation by:

Elizabeth Allen

The DeGarmo Group

Have you ever been impressed with a job applicant’s test results or personality profile, only to find out that the person you saw on paper was nothing like the person you saw on the job? How did that happen? Could that person have “faked” their way through your assessments?

Many organizations are streamlining their application process – delivering many of their pre-employment assessments “remotely” or on-line, without an organizational representative present to administer their tests. Unfortunately, while streamlining this way can save organizations time and money during the application process, it increases the chances that some applicants may be less honest and forthcoming in the way they respond to questions on the assessments.

During this session we’ll discuss the concept of applicant “response distortion” as applied to jobs in several settings (including retail sales and customer service). We’ll talk about the ways to reduce an applicant’s likelihood to “fake” their way through assessments, particularly for those delivered remotely, so that the information we use to make hiring decisions is as accurate as possible.

Finally, we’ll share the results of research on different techniques used to reduce response distortion in several organizations.

What will participants learn?

1)  The different ways applicants can distort their responses to items on pre-employment assessments

2)  How administering assessments on-line, in an unproctored setting, can increase the likelihood for inaccurate information

3)  Techniques for reducing an applicant’s likelihood to try to fake their way through assessments.

4) The impact these techniques can have on applicant test scores.

Who should attend?

1) Recruiters, Managers, Directors, VPs, etc., responsible for HR, Staffing, and Talent Acquisition.

2) Those interested in learning about the ways we can reduce faking on job assessments.

3) Business leaders.

Registration Information

If you are already a member of HR.com, please login to register for the webcast.  If you are not a member of HR.com, you will need to sign up for a FREE HR.com membership, this will only take you a moment to fill in the required information. Once you have confirmation of your membership, you will be able to register for this complimentary webcast.

Tuesday, August, 24th, 11:00 AM ET

Register Here!

Ever hire an employee with all the right skills for the job, only to watch that person walk out the door for good three weeks later? Where did you go wrong? What did you miss?

Most organizations often overlook the importance of measuring an applicant’s work tolerance as part of the talent acquisition process. Unfortunately, it doesn’t matter if the applicant has the skills to do the work if they can’t tolerate the demands of the job!

During this session we’ll discuss the concept of work tolerance as applied to jobs in several settings including retail sales and customer service. We’ll talk about the process of analyzing jobs to discover their underlying work tolerance demands, as well as approaches for using work tolerance information to improve the talent acquisition process to reduce employee turnover, and increase levels of job satisfaction.

Finally, we’ll share the results of research using work tolerance measures in several organizations representing industries such as telecommunications and financial services, but the concepts learned during this session can apply to any job, in every organization.

What will participants learn?

1)  The difference between the work tolerance and skill demands of jobs

2)  How to analyze jobs to determine their underlying work tolerance demands

3)  Methods for using work tolerance demands for improving talent acquisition

4) The impact of work tolerance characteristics for reducing employee turnover in front-line jobs

Who should attend?

1) Recruiters, Managers, Directors, VPs, etc., responsible for HR, Staffing, and Talent Acquisition.

2) Those interested in learning about the impact of work tolerance on organizational success.

3) Business leaders

Registration Information

If you are already a member of HR.com, please login to register for the webcast.  If you are not a member of HR.com, you will need to sign up for a FREE HR.com membership, this will only take you a moment to fill in the required information. Once you have confirmation of your membership, you will be able to register for this complimentary webcast.

Tuesday, August, 31st, 1:00 – 2:00 PM ET

Register Here!