A structural equation modeling to understand the determinants of employee turnover: An empirical study

Abstract

With the Indian economy growing rapidly, the rate of employment has seen a tremendous upward rise. The expansion of boundaries and the credible usage of internet have heightened the demands for highly skilled managers and professionals. An opinion poll of HR professionals from various countries reveals a unanimous view that rampant job hopping has become a culture across industries (Khatr, Chong & Budhwar, 2001: 54). A number of earlier studies suggest that the length of service in a job can be used to estimate the levels of worker job satisfaction. The assumption is that the less satisfied workers tend to resign while the more satisfied workers tend to remain in a job. This situation should result in a higher average level of satisfaction reported by employees who have been in a given organization for a greater period of time. Kim, Price Mueller & Watson (1996) Price and Mueller’s Model is a comprehensive employee turnover model which captures a 360 degree view of the determinants of employee turnover. It comprises of Individual determinants, Structural determinants, Environmental determinants, Process variables and correlates. In this paper, we initially studied the impact of age, salary and marital status of the correlates on structural and process determinants, and we further consider studying the moderating effect of eight variables of structural and two variables of process determinants in the Indian context by using Structural equation modeling.