Employees' Turnover Intention to Leave: the Malaysian Contexts

Abstract

IntroductionOrganizations worldwide today face many challenges with the growing integration of the world economy into one single, huge marketplace resulting in intense global competition. Besides needing to keep pace with technological advances, it is also crucial for an organization to be able to retain its best employees in the face of globalization and workforce diversity.Collectively, an organization's employees can provide a source of competitive advantage that is difficult for competitors to imitate. Barney (1991) firm resource model of sustained competitive advantage suggests that in order for a firm's resource to generate sustained competitive advantage, the resource must add value to the firm, is rare, cannot be imitated, and is nonsubstitutable.Turnover intention is among the strongest predictors of actual turnover and organizational commitment is one of the most important antecedents to turnover intention (Thatcher et al., 2003; Mitchel, 1981). These findings underscored the importance of organizational commitment in retaining employees and the appropriate use of intention to leave as the dependent variable because it is linked to actual turnover.The average employee turnover rate in Malaysia is 18% based on international human resource consulting firm Hewitt Associate's 2007 Total Compensation Management Survey. Whether it is involuntary, such as termination initiated by the employer, or voluntary, such as resignations, turnover is potentially costly and may have negative organizational implications. Some examples of possible negative impact of turnover to organizations are the high cost of recruiting, hiring, training and getting new employees up to speed, productivity loss during replacement search and retraining, loss of high performers, and disruption of social and communication structures (Mobley, 1982).Although the researcher has found many past studies conducted on employees' turnover intention in Malaysia as well as other countries, but the literature search did not provide any studies that were carried out with the combination of these factors: organizational commitment, participation in decision making, and work effort.This study seeks to answer the following research questions: Does employees' organizational commitment affect their intention to leave the organization? Are there any influences of the factors of participation in decision making and work effort on employees' intention to leave? The issue of commitment is important for managers because commitment to organization is positively related to desirable organizational outcomes such as job satisfaction, motivation and attendance, and negatively related to absenteeism and turnover (Lok and Crawford, 2001). With the increasing speed and scale of change in organizations, the retention of talented employees is integral to sustaining the organization's competitive advantage and growth in the marketplace.The identification of variables associated with turnover intentions is considered an effective strategy in reducing actual turnover levels (Riley, 2006). This study, in particular, seeks to ascertain the influence of the factors of participation in decision making and work effort on intention to leave, including its direction and strength of influence. With a much clearer understanding of these constructs, employers would be able to add to their knowledge base on what causes employees to choose to leave the organization. Subsequently, employers would be able to manage the turnover process more effectively through appropriate interventions.Below, we review the literature and develop related hypothesis for the variables of interest. The sampling design, selection of measurement scales and data analysis techniques are then described. This is followed by a presentation and discussion of results, limitations of study and implications for practitioners and future research.Literature ReviewEmployee turnover definedEmployees may leave an organization either voluntarily or involuntarily. …