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


  • Zeynep Ton

    () (Harvard Business School, Boston, Massachusetts 02163)

  • Robert S. Huckman

    () (Harvard Business School, Boston, Massachusetts 02163)


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.

Suggested Citation

  • Zeynep Ton & Robert S. Huckman, 2008. "Managing the Impact of Employee Turnover on Performance: The Role of Process Conformance," Organization Science, INFORMS, vol. 19(1), pages 56-68, February.
  • Handle: RePEc:inm:ororsc:v:19:y:2008:i:1:p:56-68

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    References listed on IDEAS

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    4. John P. Hausknecht & Jacob A. Holwerda, 2013. "When Does Employee Turnover Matter? Dynamic Member Configurations, Productive Capacity, and Collective Performance," Organization Science, INFORMS, vol. 24(1), pages 210-225, February.
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    9. Allen, Mathew R. & Adomdza, Gordon K. & Meyer, Marc H., 2015. "Managing for innovation: Managerial control and employee level outcomes," Journal of Business Research, Elsevier, vol. 68(2), pages 371-379.
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    11. John V. Gray & Enno Siemsen & Gurneeta Vasudeva, 2015. "Colocation Still Matters: Conformance Quality and the Interdependence of R&D and Manufacturing in the Pharmaceutical Industry," Management Science, INFORMS, vol. 61(11), pages 2760-2781, November.
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    13. Tat Y. Chan & Jia Li & Lamar Pierce, 2014. "Learning from Peers: Knowledge Transfer and Sales Force Productivity Growth," Marketing Science, INFORMS, vol. 33(4), pages 463-484, July.
    14. Mohammad Iranmanesh & Suhaiza Zailani & Soroush Moeinzadeh & Davoud Nikbin, 2017. "Effect of green innovation on job satisfaction of electronic and electrical manufacturers’ employees through job intensity: personal innovativeness as moderator," Review of Managerial Science, Springer, vol. 11(2), pages 299-313, March.
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    16. Christina Fang & Jeho Lee & Melissa A. Schilling, 2010. "Balancing Exploration and Exploitation Through Structural Design: The Isolation of Subgroups and Organizational Learning," Organization Science, INFORMS, vol. 21(3), pages 625-642, June.
    17. Carolyn D. Egelman & Dennis Epple & Linda Argote & Erica R. H. Fuchs, 2017. "Learning by Doing in Multiproduct Manufacturing: Variety, Customizations, and Overlapping Product Generations," Management Science, INFORMS, vol. 63(2), pages 405-423, February.
    18. Carolyn D. Egelman & Dennis Epple & Linda Argote & Erica R.H. Fuchs, 2013. "Learning by Doing in a Multi-Product Manufacturing Environment: Product Variety, Customizations, and Overlapping Product Generations," NBER Working Papers 19674, National Bureau of Economic Research, Inc.
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    21. David G. McKendrick & James B. Wade & Jonathan Jaffee, 2009. "A Good Riddance? Spin-Offs and the Technological Performance of Parent Firms," Organization Science, INFORMS, vol. 20(6), pages 979-992, December.
    22. Edward G. Anderson & Kyle Lewis, 2014. "A Dynamic Model of Individual and Collective Learning Amid Disruption," Organization Science, INFORMS, vol. 25(2), pages 356-376, April.
    23. Alexander Bolton & John M. de Figueiredo & David E. Lewis, 2016. "Elections, Ideology, and Turnover in the U.S. Federal Government," NBER Working Papers 22932, National Bureau of Economic Research, Inc.


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