Organizations must try to ensure that good performers want to stay with the organization
and that employees whose performance is chronically low are encouraged—
or forced—to leave. Both of these challenges involve employee turnover, that is,
employees leaving the organization. When the organization initiates the turnover
(often with employees who would prefer to stay), the result is involuntary turnover.
Examples include terminating an employee for drug use or laying off employees during
a downturn. Most organizations use the word termination to refer only to a discharge
related to a discipline problem, but some organizations call any involuntary turnover
a termination. When the employees initiate the turnover (often when the organization
would prefer to keep them), it is voluntary turnover. Employees may leave to
retire or to take a job with a different organization.
In general, organizations try to avoid the need for involuntary turnover and to
minimize voluntary turnover, especially among top performers. Both kinds of turnover
are costly, as summarized in Table 10.1 . Replacing workers is expensive, and
new employees need time to learn their jobs and build teamwork skills. 4
In addition,
people today are more ready to sue a former employer if they feel they were unfairly
discharged. The prospect of workplace violence also raises the risk associated with
discharging employees. Effective human resource management can help the organization
minimize both kinds of turnover, as well as carry it out effectively when necessary.
Despite a company’s best efforts at personnel selection, training, and compensation,
some employees will fail to meet performance requirements or will violate company
policies. When this happens, organizations need to apply a discipline program that
could ultimately lead to discharging the individual.