Managing the Impact of Employee Turnover on Performance: The Role of Process Conformance

Zeynep  Ton; Robert S. Huckman

Article | Organization Science | January – February 2008

Managing the Impact of Employee Turnover on Performance: The Role of Process Conformance

Abstract

We examine the impact of employee turnover on operating performance in settings that require high levels of knowledge exploitation. Using 48 months of turnover data from U.S. stores of a major retail chain, we find that, on average, employee turnover is associated with decreased performance, as measured by profit margin and customer service. The effect of turnover on performance, however, is mitigated by the nature of management at the store level. The particular aspect of management on which we focus is process conformance—the extent to which managers aim to reduce variation in store operations in accordance with a set of prescribed standards for task performance. At high-process-conformance stores, managers use discipline in implementing standardized policies and procedures, whereas at low-process-conformance stores, managers tolerate deviations from these standards. We find that increasing turnover does not have a negative effect on store performance at high-process-conformance stores; at low-process-conformance stores, the negative effect of turnover is pronounced. Our results suggest that, in settings where performance depends on the repetition of known tasks, managers can reduce turnover's effect by imposing process discipline through standard operating procedures.

Keywords: Customer Focus and Relationships; Governance Compliance; Retention; Standards; Service Operations; Business Processes; Retail Industry; United States;

Format: Print

13 pages

Find at Harvard Read Now

Citation:

Ton, Zeynep, and Robert S. Huckman. "Managing the Impact of Employee Turnover on Performance: The Role of Process Conformance." Organization Science 19, no. 1 (January–February 2008): 56–68.

In 2015, the Department of Veterans Affairs (VA) ran the largest healthcare system in the United States, with over 1,700 sites of care that served nearly 9 million veterans. One year earlier, a scandal had erupted over a cover-up of the excessive wait times veterans faced to get medical appointments in some VA facilities. The fallout led to the resignation of the Secretary of Veterans Affairs, a criminal investigation by the Federal Bureau of Investigation, and the eventual replacement of 14 of VA’s top 17 leaders. This case documents the efforts of the new leadership team to improve access, regain trust, and transform the organization to address the broadening medical needs of the nation's growing veteran population. Teaching Note for HBS No. 617-012.

Article | Milbank Quarterly

Toward a Corporate Culture of Health: Results of a National Survey

Michael Anne Kyle, Lumumba Seegars, John M. Benson, Robert J. Blendon, Robert S. Huckman and Sara J. Singer

Context: The private sector has a large potential role in advancing health and well-being, but attention to corporate practices around health tends to focus on a narrow range of issues and on large businesses. Systematically describing private sector engagement in health and well-being is a necessary step toward understanding the current state of the field and developing an agenda for businesses going forward.
Methods: We conducted a national survey of 1,017 private sector organizations to assess current levels of engagement in what we term a culture of health (CoH). We measured corporate CoH along four dimensions, which assess the extent to which businesses promote employee, environmental, consumer, and community health and well-being.We also explored potential explanations for the number of health-related actions taken in each dimension.
Findings: On average, businesses took 38% of health-related actions included in our survey. For each dimension, we found variation among businesses in the number of actions taken (on average, there were almost fourfold differences between the bottom and top quartiles of businesses in terms of actions taken). Mentioning health and well-being in the corporate mission, having a strategic plan for CoH, and perceiving a positive return on CoH investments were all associated with businesses’ actions taken. Fewer than half of businesses, however, perceived a positive return on their CoH investments.
Conclusions: Overall, the private sector is taking steps to foster health and well-being. However, there remains substantial variation among businesses and opportunity for growth, even among those currently taking the most action. Strengthening the business case for a corporate CoH may increase private sector investments in health and well-being. Actions taken by individual businesses, business groups, industries, and regulators have the potential to improve corporate engagement and impact.

Keywords: Corporate Health; social determinants of health; Health Policy; public health; Organizations; Health; Policy; Surveys;

Citation:

Kyle, Michael Anne, Lumumba Seegars, John M. Benson, Robert J. Blendon, Robert S. Huckman, and Sara J. Singer. "Toward a Corporate Culture of Health: Results of a National Survey." Milbank Quarterly 97, no. 4 (December 2019): 954–977. View Details

Cite View Details Find at Harvard

National retailers, most notably Walmart and Best Buy, are making big bets on their ability to fill this need for local health care. At first glance, these moves are a bit surprising given that these companies have not traditionally been focused on health care delivery. But inroads made by e-retailers has left these companies with two sets of resources—large store locations and an army of low-wage employees—that are at risk of becoming stranded assets. And recent announcements from Walmart and Best Buy suggest that the companies may see the provision of local health care as an opportunity to redeploy their store employees.

Faculty & Research

Managing the Impact of Employee Turnover on Performance: The Role of Process Conformance

Abstract

Citation:

About the Author

More from the Author