High-performer turnover and firm performance: The moderating role of human capital investment and firm reputation

an article by Kiwook Kwon (Konkuk University, Seoul, Korea) and Deborah E. Rupp (Purdue University, West Lafayette, Indiana, USA) published in Journal of Organizational Behavior Volume 34 Issue 1 (January 2013)

Summary

Research has shown a complex relationship between turnover and firm performance. Not only does it matter who leaves (e.g., high-performing versus low-performing employees), but the context also stands to influence this effect in complex ways.

We apply human capital theory, social capital theory, and the cost–benefit perspective to propose two boundary conditions to the high-performer turnover and firm performance relationship.

Specifically, we predict that the negative impact of high-performer turnover on firm performance will be the strongest for reputable firms and for firms who invest less in human capital (e.g., selection, training, and incentive-based pay).

We present data from 155 South Korean firms that support the hypothesized model.

We discuss findings in terms of current and future theory, practical implications, and subsequent research needs.

Copyright © 2012 John Wiley & Sons, Ltd.

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