Quits Versus Discharges Across Job Levels: Revisiting the Positive Side of Turnover

Abstract

Although the functional effects of turnover have been argued from the earliest research in the field, empirical evidence so far supports a general negative effect on unit performance, and attempts to explore its potential benefits are scarce. It has been argued that one reason for the absence of positive effects has to do with a lack of specificity of the turnover construct. The present study focuses on two sources of specificity: the reason for turnover and the job level of the departing employees. Our objective is to perform integrative research to analyze their joint effects and discuss how the four turnover scenarios created by their combination make their potential benefits of departures salient. We integrate arguments from human and social capital theories with the literature on team adaptation and change to develop our conceptual framework, and test our hypotheses using longitudinal monthly data from 5,202 stores of a large fashion multinational retailer in 39 countries. Our results provide evidence of a curvilinear relationship between staff quits and unit performance, and show that discharges are linearly beneficial both for managerial and staff positions, although at different degrees. Our findings demonstrate that differentiating between quits and discharges matters, and that the relative value conveyed by the job level of the departing employees is a relevant contingency in this distinct effect over performance.