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Organizational Responses: Employee Retention

The turnover literature identifies various ways to increase employee retention. In this section, we highlight four research insights for reducing unwanted turnover: 1) create a positive work environment, 2) promote fit, 3) encourage leaders to behave in supportive ways and 4) help employees manage shocks.

Create a positive work climate

Researchers have found that one of the best ways to prevent turnover is to cultivate a positive work environment (e.g., Ramsay, 2006; Vance, 2006). Work climate is how employees perceive their work environment, which is based on the cultural values and beliefs the organization holds. To enhance employee retention, a work climate must have a set of positive company values and beliefs as its foundation. High-retention companies tend to have a strong and engaging organizational culture that is based on integrity, respect, equality, teamwork and worker involvement (Holtom, Mitchell, Lee & Eberly, 2008; Richman, Civian, Shannon, Jeffrey & Brennan, 2008). These positive values can help create a work climate that employees perceive as rewarding, supportive and equitable. It is the leaders of organizations who are largely responsible for cultivating a positive culture not only by establishing positive work values for the organization, but also in their daily actions and decisions enacting the company’s beliefs (Breevaart, Bakker, Hetland, Demerouti, Olsen & Espevik, 2014; Campbell, Perry, Maertz, Allen & Griffeth, 2013).

Earlier studies have demonstrated the importance of work climate for turnover and retention. For instance, perceptions of supervisor support, organizational support and procedural justice have all been linked with lower turnover intentions, mainly by increasing employee commitment and reducing burnout (Campbell et al., 2013; Maertz et al., 2007; Posthuma, Maertz & Dworkin, 2007). Conversely, perceptions of inequity, such as a psychological contract breach, can increase turnover intentions (Chin & Hung, 2013). Thus, the research implies that companies must create positive work experiences for employees in order to increase satisfaction and commitment and thereby increase intentions to stay (Allen et al., 2010; Boro§ & Cur§eu, 2013; Chang et al., 2013). To do so, it is critical that HR and leaders continually assess whether organizational policies (e.g., reward systems) are fair and competitive and whether managerial actions (e.g., pay and promotion decisions) are supportive and just.

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