The Effect of Poor Employee Retention on Organizational Performance and Employee Engagement
Abstract
Employee retention is a critical aspect of organizational success, as it directly affects various aspects
of a company’s performance and the well-being of its workforce. This research article aims to explore
the effects of poor employee retention on organizational performance and employee engagement. It
examines the factors contributing to high turnover rates, identifies the consequences of inadequate
retention strategies, and proposes effective solutions for improving employee retention. The research
methodology involves a comprehensive literature review, gathering relevant data from various sources
such as academic articles, industry reports, and case studies. The findings are analyzed to identify key
factors contributing to poor employee retention and their subsequent effects on organizational
performance and employee engagement. Poor employee retention negatively affects organizational
performance in several ways. First of all, it raises turnover expenses such as hiring, training, and lost
productivity. This financial burden can strain an organization’s resources, reducing profitability and
overall performance. Additionally, high turnover rates can disrupt workflow, decrease team cohesion,
and hinder knowledge transfer, resulting in a decline in productivity and quality of work. By recognizing
the detrimental impact of poor employee retention on organizational performance and employee
engagement, organizations can prioritize initiatives to enhance retention and create a positive work
environment. This study’s findings provide valuable insights for managers and human resource
professionals to develop and implement effective strategies that contribute to improved retention,
increased productivity, and higher levels of employee engagement.
References
Allen DG, Bryant PC, Vardaman JM. Retaining talent: replacing misconceptions with evidence-
based strategies. Acad Manag Perspect. 2010; 24 (2): 48–64. doi: 10.5465/amp.24.2.48.
Cascio W. Managing human resources. Chicago, IL, USA: McGraw-Hill Higher Education; 2015.
Griffeth RW, Hom PW, Gaertner S. A meta-analysis of antecedents and correlates of employee
turnover: update, moderator tests, and research implications for the next millennium. J Manag.
; 26 (3): 463–488. doi: 10.1177/014920630002600305.
Holtom BC, Mitchell TR, Lee TW, Eberly MB. 5 Turnover and retention research: a glance at the
past, a closer review of the present, and a venture into the future. Acad Manag Ann. 2008; 2 (1):
–274. doi: 10.5465/19416520802211552.
Meyer JP, Stanley DJ, Herscovitch L, Topolnytsky L. Affective, continuance, and normative
commitment to the organization: a meta-analysis of antecedents, correlates, and consequences. J
Vocat Behav. 2002; 61 (1): 20–52. doi: 10.1006/jvbe.2001.1842.
Saks AM, Gruman JA. What do we really know about employee engagement? Hum Resour Dev Q.
; 25 (2): 155–182. doi: 10.1002/hrdq.21187.
Steel RP, Lounsbury JW. Turnover process models: review and synthesis of a conceptual literature.
Hum Resour Manag Rev. 2009; 19 (4): 271–282. doi: 10.1016/j.hrmr.2009.04.002.
Shaw JD, Gupta N, Delery JE. Alternative conceptualizations of the relationship between voluntary
turnover and organizational performance. Acad Manag J. 2005; 48 (1): 50–68. doi:
5465/amj.2005.15993112.
Steel RP, Lounsbury JW. Turnover process models: review and synthesis of a conceptual literature.
Hum Resour Manag Rev. 2009; 19 (4): 271–282. doi: 10.1016/j.hrmr.2009.04.002.
Westman M, Etzion D. The impact of vacation and job stress on burnout and absenteeism. Psychol
Health. 2001; 16 (5): 595–606. doi: 10.1080/08870440108405529, PMID 22804501.
Zhang Y, Shaw JD. Turnover intention and voluntary turnover: the moderating roles of self-
monitoring, locus of control, proactive personality, and risk aversion. J Appl Psychol. 2012; 97 (3):
–590.
