Academic journal article Global Business and Management Research: An International Journal

Linking Trust and Turnover Intention: A Conceptual Framework

Academic journal article Global Business and Management Research: An International Journal

Linking Trust and Turnover Intention: A Conceptual Framework

Article excerpt

INTRODUCTION

In recent times, intense attention by academicians and practitioners has been directed to the subject of employee turnover. This is due to the severity of employee turnover rates in various organizations across the globe and the damaging consequences that follow (Lee et al., 2010). In the year 2013, a study by Towers Watson indicated that the employee turnover rate in Malaysia was 13.2%, an increase of 0.9% from the year before.

Hewitt Associates reported that the employee turnover rate in the year 2010 was 10.1% which was an increase of 0.8% from the year before. During this period, the IT industry and financial services recorded the highest rates of employee turnover; 18.3% and 20% respectively, while the chemicals industry recorded the lowest; 6.3%. In addition, nearly 300,000 young Malaysian employees who constitute over 50% of the country's total workforce have migrated to neighbouring countries over these years (Choong et al., 2013; Malaysian Statistical Department, 2011). This phenomenon, known as brain drain, jeopardizes all efforts towards attaining a developed nation by the year 2020. These values suggest that employee turnover will continue to be a major problem to organizations and the government (Gim et al., 2015).

In organizations, cost has been identified as the major consequence of high employee turnover rates. High cost of selecting, recruiting, and training new employees is endured by the organization each time an employee leaves (Boushey and Glynn, 2012). Lucas (2012) states that, to replace an executive, the organization incurs cost 213% more than the parting executive's salary. Besides that, high employee turnover rates hamper implementation of new ideas and basket improvements which consequently affect productivity, performance, and revenues of organizations (Ghosh et al., 2013; Boushey and Glynn, 2012; Costigan et al., 2012). In the long run, these affected organizations lose out to their competitors and are left behind in the race (Ismail and Lim, 2007). Furthermore, employees that leave an organization undergo stress due to uncertainty and miss out in terms of seniority and experience (Kodwani and Kumar, 2004).

Based on these realities, it is therefore not surprising that a lot of time and effort are channelled towards identifying root causes of employee turnover in a myriad of circumstances with the hope of curbing this issue. After an extensive review of existing literature, this paper stresses the need of exploring trust as a salient antecedent to employee turnover.

LITERATURE REVIEW

Turnover Intention

Turnover intention is explained as an employee's voluntary decision to leave an organization (Wayne et al., 1997). Turnover intention is observed as the best predictor of actual employee turnover (Costigan et al., 2012) and theory of planned behaviour ascertains this conceptualization (Makhbul et al., 2011) Many studies have stressed and proven the positive relationship these two constructs share (Gim et al., 2015; Cotton and Tuttle, 1986; Bigliardi et al., 2005).

Furthermore, as the saying goes, prevention is better than cure, focusing on turnover intention amongst employees rather than actual turnover will benefit the organizations as remedial measures can be still taken before these employees actually quit (Gim et al., 2015). Circumstances that instigate the intention to leave amongst the employees can be eliminated and hence reducing actual employee turnover rate (Griffeth et al., 2000). In addition, overall morale of employees in an organization can be undesirably affected by contagious negative mind set and actions which accompany high turnover intention (Costigan et al., 2012). It is therefore justified to use turnover intention as a tool to predict actual employee turnover (Gim et al., 2015).

Why an employee develops the intention to quit an organization? As mentioned, many studies have been conducted in various settings to answer this significant query. …

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