The Impact of Work Environment on Employee Turnover

The Impact of Work Environment on Employee Turnover

According to Allen & Vardaman (2021), employee turnover is an organization’s rate of losing employees. The main types of turnover include voluntary, involuntary, dysfunctional, and functional turnover. Voluntary turnover arises when employees willingly leave the organization, while involuntary turnover occurs when employees are fired from the organization by their employer. To follow this, functional turnover arises when underperforming employees leave an organization’s workforce, while dysfunctional turnover arises when employees with leadership potential leave an organization. Employee turnover may be caused by environmental, individual, and structural factors. Environmental factors include an employee’s responsibilities in the organization and employment opportunities. On the other hand, individual factors include a commitment to the organization, job satisfaction, attitude towards work and the organization, and willingness to work hard. Structural factors include fairness, autonomy, compensation, social support, work routine, and work pressure. Employee turnover rate may be influenced by the prevailing conditions in an industry, such as the use of technology and new job demands.

According to Cobb (2022), the work environment is the sum of the interrelationships between employers and employees and the environment in which employees complete assigned tasks. The work environment shapes employees’ attitudes toward their work. The main types of work environments include traditional, collaborative, modern, remote, and flexible work environments. A traditional work environment includes a rigid hierarchy and strict control of employees’ activities within the workplace. A collaborative work environment emphasizes teamwork among employees to share ideas and learn from each other, while a modern work environment includes using modern concepts and technologies to complete assigned tasks within the organization efficiently. Subsequently, a remote work environment includes completing the tasks the employer assigns outside the organization’s premises, while a flexible work environment includes giving employees the autonomy to complete assigned tasks and implement creative ideas. The suitability of a work environment can be measured based on the safety of employees, comfort, availability of resources needed to complete assigned tasks, and the relationship between employees and their superiors, subordinates, and coworkers.

The competition for skilled employees in the job market has created a need for employee retention. The role of skilled employees in increasing organizational performance has also increased organizational focus on employee retention. According to Shethna & Thakur (2023), employees’ skills account for 85% of the assets in an organization. Therefore, organizations must invest in employee retention to improve their performance. Although employee turnover is mainly associated with negative impacts on the organization, such as reduced organizational performance and increased operational costs, Lee (2017) argues that turnover can benefit organizations. According to Lee (2017), employee turnover is necessary because it prevents stagnation and contributes to the development of healthy working conditions by prompting organizations to improve the work environment. The author adds that employee turnover also enables an organization to acquire new, experienced employees, leading to high organizational performance. The author concludes that the impact of employee turnover on an organization is influenced by the type of turnover. For example, involuntary turnover may benefit an organization by enabling it to meet its staffing needs. Another study by Al-Suraihi et al. (2021) indicates that employee turnover is important because it enables organizations to acquire new employees with the knowledge, skills, and competencies needed to complete specific organizational tasks. Therefore, it is important to review both the positive and negative impacts of employee turnover to help organizations determine the extent to which it may be acceptable.

The relationship between employee turnover and the work environment is evident in the factors in the work environment that increase the intention to leave. Various studies have explored the work environment factors that could increase employees’ intentions to leave. According to Alzayed & Murshid (2017), employee turnover may be caused by role ambiguity, job stress, and lack of autonomy. Job stress includes the extent to which job duties and responsibilities are hard to accomplish. Employees may quit if they feel that their duties and responsibilities are strenuous based on the time and effort required to accomplish them. Job stress may also arise from role conflict, which arises from the incompatibility between the expected behaviors perceived by an employee and those expected by the employer (Alzayed & Murshid, 2017). Role ambiguity arises from uncertainty about the roles, duties, and tasks the employer expects employees to perform. According to Mohammadi (2016), role ambiguity reduces job satisfaction leading to high employee turnover. Lack of autonomy also reduces job satisfaction by reducing an employee’s sense of belonging, resulting in voluntary turnover. Reduced job satisfaction could also reduce employee productivity leading to involuntary turnover when an organization decides to fire unproductive employees. The changes in the modern-day work environment create new challenges in maintaining job satisfaction and reducing employee turnover. Therefore, it is important to understand the impact of the work environment on employee turnover to help organizations prepare to mitigate turnover.

A study conducted by Suifan et al. (2016) on the impact of work-life balance on employee turnover in private hospitals indicated that support from managers and autonomy cause employee turnover. Another study by Saeed et al. (2013) on the relationship between work-life balance and turnover indicated that a lack of work-life balance causes stress resulting in high turnover. Meirina et al. (2018) reviewed the impact of work environment on turnover in the hospitality industry and established that work environment impacted employee turnover intention by 30.9%. The work environment may also cause turnover based on the workload assigned to employees. According to Meirina et al. (2018), a lot of workload causes burnout and stress, which are the leading causes of employee turnover. Workload may also reduce employee morale leading to reduced productivity and absenteeism, which could cause involuntary turnover. Employees may also leave an organization if it does not offer career growth opportunities and employee recognition. Organizations focus on reducing turnover to reduce the costs of hiring and training new employees.

Problem Focus

Employee retention is a major concern in the modern business environment because of stiff competition for skilled and experienced workers. Organizations must also retain skilled and experienced employees to increase competitive advantage and sustain themselves. Skilled and experienced employees also play a vital role in an organization’s performance hence the need to retain them. Employee turnover has also been a major issue in many organizations since the COVID-19 pandemic. Many organizations have not fully recovered from the negative impacts of the pandemic and are struggling to pay their employees on time, leading to a voluntary and functional turnover. The modern work environment is also being impacted by many factors within the business environment that are beyond the organization’s control, making it hard for organizations to remain consistent in providing a conducive work environment. For example, the COVID-19 pandemic disrupted many organizations’ work environments, especially in the hospitality and healthcare sector, leading to high employee turnover. For example, the pandemic increased turnover intentions among healthcare providers because of too much workload, payment delays, and lack of work-life balance (McCartney et al., 2022). Subsequently, the work environment in the hospitality industry during the pandemic was characterized by payment delays and job uncertainty leading to high turnover.

Currently, the hospitality industry is among the industries experiencing high turnover because the industry is mainly seasonal. Ariza-Montes et al. (2019) state that the hospitality sector has the highest employee turnover rate because of high job demands arising from high seasonality in the industry. Employees in the hospitality industry are also at risk of developing stress and burnout because of pressure from management to deliver high-quality customer service and job insecurity. Many employees in the hospitality industry also lack support from management and job control, thus decreasing their sense of belonging. The hospitality industry is also among the industries with the highest job insecurity leading to high turnover. Job insecurity is an employee’s fear of unemployment (De Cuyper & De Witte, 2021). According to Arjona-Fuentes et al. (2019), working conditions in the hospitality industry should be scrutinized extensively because of their risky nature characterized by seasonality, low stability, reduced wages, part-time work, discrimination, and exhausting work schedules. Understanding the relationship between working conditions and employee turnover in the hospitality industry is also important because the human resource management department faces challenges in determining operating hours, dealing with intensive job demands, and adjusting to seasonal fluctuations. The high competition for skilled and qualified employees in the hospitality industry also requires an understanding of what an organization can do to prevent turnover. According to Bahadur (2022), the hospitality industry faces a demand-supply gap in staffing because of the expansion of hotels at an annual rate of 20 to 25 percent. Bahadur (2022) adds that there is also a widening skills gap and high customer expectations in the hospitality industry. Therefore, organizations in the hospitality industry must invest in increasing employee retention to save costs that would be incurred in hiring and training new employees. Hiring new employees could also impact customer service and an organization’s performance hence the need to understand the relationship between work environment and employee turnover to create a conducive work environment and prevent turnover.

Addressing employee turnover is important because the problem affects not only the organization but also employees and customers. For example, when employees leave an organization, the organization incurs the cost of hiring and training new employees, thus increasing operating costs. An increase in operating costs may force the organization to increase the cost of goods and services, thus affecting customers. Employee turnover also causes delays in goods and services, reducing customer satisfaction. Most literature on the impact of work environment on employee turnover focuses on the organization’s role in creating a conducive or non-conducive work environment. There is limited research on how employees create a conducive and non-conducive work environment. Therefore, it is important to understand the role of employees in creating a work environment that increases or reduces turnover. Organizations can use this information to prevent employee turnover, thus protecting the organization from the negative consequences of turnover, such as high operating costs, loss of skilled employees, poor organizational performance, and bad organizational reputation.

Theoretical/Conceptual Framework

This research will apply Herzberg’s Theory. Fredrick Herzberg developed this theory in the late 1950s. Notably, this theory of motivation was informed by interviews that Herzberg made with a group of employees to evaluate what made them satisfied or dissatisfied with their job (Thant & Chang, 2021). From the interviews, two important dimensions were identified and framed to be hygiene issues and motivation. Hygiene issues include supervision and salary, which can influence an employee’s satisfaction with the work environment. On the other hand, motivators include achievement and recognition, which satisfy employees with their work environment.

Herzberg’s theory has been applied in contemporary practice since its formulation, with organizations identifying their hygiene and motivation issues and giving them necessary attention (Siruri & Cheche, 2021). Regarding hygiene issues, organizations ensure that their administrative policies, supervision, and work conditions do not cause workers dissatisfaction. On the other hand, the same organization ensures employees are motivated through better salaries, the work itself, recognition, advancement, and responsibility for workers (Mohammed et al., 2021). The application of Herzberg’s theory in modern practice makes it a suitable application in the theoretical framework of the current study.

Overall, the theory offers useful insights that can be used in contemporary life and for research purposes. For my topic of study, the theory will help shape the research questions to be included in questionnaires. For instance, to evaluate how an organization’s administrative policy influences worker’s decision to stay, I will inquire whether the organization has a policy manual, whether employees have ease of access to policies, fairness of the policies, the policies’ ease of understanding, employees’ input in the policies, and how the policies compare with those of other organizations in the same industry. Notably, this is an example of how the hygiene factor, as identified in Hertzberg’s theory, will be borrowed and applied. A similar application will be done to all other factors relevant to the subject research topic.

Literature Search Strategy

The literature strategy was defined by the topics and subtopics in the current study. The main search terms that were used to get information to support the arguments made in the study included employee turnover, work environment, role conflict, role ambiguity, work-life balance, employee turnover in the hospitality sector, job insecurity, working conditions, Herzberg’s Theory, organizational culture, the link between organizational culture and employee turnover and the link between job satisfaction and employee turnover. The types of literature used in the study included case studies, peer-reviewed journal articles, and discussion papers published between 2015 and 2022. The databases used to access the case studies, peer-reviewed journal articles, and discussion papers included Google Scholar, ETHospitalityWorld.com, and the Oxford Research Encyclopedia of Psychology. Table 1 below summarizes the literature strategy.

Table 1: Literature Strategy

Search terms	·         Employee turnover ·         Work environment ·         Role conflict ·         Role ambiguity ·         Work-life balance ·         Employee turnover in the hospitality sector ·         Job insecurity ·         Working conditions ·         Herzberg’s Theory ·         Organizational culture ·         The link between organizational culture and employee turnover ·         The link between job satisfaction and employee turnover
Types of Literature	·         Peer-reviewed journal articles ·         Case studies ·         Discussion papers
Years	2015-2023
Databases	·         Google Scholar ·         A-Z databases

Working Themes

The Link Between Organizational Culture and Employee Turnover

Organizational culture dictates how employees behave within an organization. It consists of the shared values and beliefs established by the leaders in an organization and are communicated and reinforced through various approaches. Organizational culture influences employee perception towards their work and the organization, thus impacting their behaviour. A good organizational culture effectively creates a positive perception of an organization. The main factors that shape an organization’s culture include hierarchy, values, urgency, task or people orientation, functional orientation, and organizational subcultures (Collins, 2021). According to Bosomtwe & Obeng (2018), the relationship between employee turnover intention and organizational culture has gained significance because of the intense competition created by globalization in the business environment. A study conducted by Yeun & Han (2015) in South Korea indicated that relational and innovative cultures negatively impact employee turnover because of work burnout and bullying. Another study by Haggalla (2017) indicated that clan culture reduces employee turnover because employees feel more satisfied. Bosomtwe & Obeng (2018) argues that determining the relationship between organizational culture and employee turnover requires considering an organization’s cultural traits and acknowledging that the traits impact employees differently. For example, some employees may be more satisfied when they are given huge responsibilities in the organization and the ability to complete the responsibilities under limited supervision, while others may consider huge responsibilities under minimum supervision as too demanding, leading to turnover. Other organizational culture traits that could impact employee turnover include involvement, consistency, and adaptability (Bosomtwe & Obeng, 2018). For example, organizations that are not consistent in their operations and are constantly making changes that impact employee workload and job demands may experience high employee turnover. Organizations that are unable to effectively adapt to changes in the business environment may also experience high employee turnover because of reduced job security. Organizations involving employees in operations and decision-making may experience reduced turnover because of high job satisfaction and employee commitment.

The Link Between Job Satisfaction and Employee Turnover

Job satisfaction is a person’s attitude toward their work (Spector, 2022). According to Inayat & Jahanzeb Khan (2021), job satisfaction creates a foundation of how employees perceive themselves in the work environment. Job satisfaction mainly includes an individual’s feelings about a job’s specific aspects. For example, employees may be more satisfied with their jobs if they are well compensated, recognized, and given autonomy to make and implement decisions. Researchers have established a relationship between job satisfaction as part of the work environment and employee turnover. The main factors relating to job satisfaction include personal factors, factors in the job, and factors controlled by management (Arli, 2018). Personal factors that impact the level of job satisfaction may vary between sex, education, age, and time of job. According to Spector (2022), job factors that impact job satisfaction include the skills required to complete tasks within the job, the type of work, responsibility, and occupation status. The factors controlled by management include working conditions, wages, security, benefits, and opportunities for promotion. According to (Taheri et al. (2020), many organizations in the modern business environment are experiencing job satisfaction issues because of the dynamic nature of the business environment. Therefore, it is important to understand the impact of job satisfaction on an organization.

According to Kholiq & Miftahuddin (2019), job satisfaction is among the leading causes of employee turnover in many organizations. The main attributes linked to job satisfaction and employee turnover include perceived job stress, communication, and compensation. Perceived job stress arises from job-related demands such as work overload and lack of autonomy (Attar et al., 2021). Although employees prefer being recognized for their contribution to an organization’s success, George et al.(2021) argue that many organizations are more focused on revenue and production, leading to job dissatisfaction and high turnover. Lack of communication creates a disconnection between employees and an organization leading to job dissatisfaction. Lack of communication also creates confusion in the workplace, limiting an employee’s ability to utilize their full potential, which could create job dissatisfaction and turnover. Job stress creates job dissatisfaction and a high intention to leave, leading to high turnover because employees are unable to be productive and meet the organization’s goals and expectations.

According to Frederiksen (2015), job satisfaction can be measured based on work-life conflict, compensation, opportunity for career growth, job security and the work environment. Work-life conflict refers to the internal level of satisfaction that a person gets when they compare a job’s benefit with their personal life. Employees develop job satisfaction if they perceive that their work positively impacts their lives. Compensation plays a vital role in increasing job satisfaction (Frederiksen, 2015). Employees are more satisfied if they are well compensated through adequate pay and financial and non-financial benefits. Although most research indicates that most employees are motivated by high pay, recent research by Siyal & Garavan (2022) indicates that modern-day employees are more motivated by benefits that enable them to meet security, physical, self-actualization, and social demands. Job security has gained significance in employee retention because of the high competition for skilled employees in the modern job market. Organizations are focusing on preventing downsizing and restructuring to prevent tension among employees because it would result in voluntary turnover (Wright, 2021). The opportunity for career development increases job satisfaction by creating a sense of belonging among employees because they feel that the organization cares about them and their future.

References

Allen, D. G., & Vardaman, J. M. (2021). Global talent retention: Understanding employee turnover around the world. Global Talent Retention: Understanding Employee Turnover around the World, 1–15. https://doi.org/10.1108/978-1-83909-293-020211001

Al-Suraihi, W. A., Samikon, S. A., Al-Suraihi, A.-H. A., & Ibrahim, I. (2021). Employee turnover: Causes, importance and retention strategies. European Journal of Business and Management Research, 6(3), 1–10. https://doi.org/10.24018/ejbmr.2021.6.3.893

Alzayed, M., & Murshid, M. (2017). Factors Influencing Employees’ Intention to Leave Current Employment in the Ministry of Information in Kuwait. Australian Journal of Business Science Design & Literature, 10(1).

Ariza-Montes, A., Hernández-Perlines, F., Han, H., & Law, R. (2019). The human dimension of the hospitality industry: Working Conditions and psychological well-being among European servers. Journal of Hospitality and Tourism Management, 41, 138–147. https://doi.org/10.1016/j.jhtm.2019.10.013

Arli, N. (2018). Analysis of factors affecting employee job satisfaction. Proceedings of the 38th International Academic Conference, Prague. https://doi.org/10.20472/iac.2018.038.004

Attar, M., Çağlıyan, V., & Abdul-kareem, A. (2021). Evaluating the moderating role of work-life balance on the effect of job stress on job satisfaction. Istanbul Business Research. https://doi.org/10.26650/ibr.2020.49.0081

Bahadur, R. (2022, August 4). How skill shortages can be a threat to growth in the hospitality sector – ET hospitality world. ETHospitalityWorld.com. https://hospitality.economictimes.indiatimes.com/news/speaking-heads/how-skill-shortages-can-be-a-threat-to-growth-in-the-hospitality-sector/93339100

Cobb, E. P. (2022). Envisioning the modern work environment. Managing Psychosocial Hazards and Work-Related Stress in Today’s Work Environment, 172–179. https://doi.org/10.4324/9781003187349-25

De Cuyper, N., & De Witte, H. (2021). Job insecurity. Oxford Research Encyclopedia of Psychology. https://doi.org/10.1093/acrefore/9780190236557.013.17

George, G., Haas, M., McGahan, A., Schillebeeckx, S., & Tracey, P. (2021). Purpose in the for-profit firm: A review and Framework for Management Research. Journal of Management, 49(6), 1841–1869. https://doi.org/10.1177/01492063211006450

Inayat, W., & Jahanzeb Khan, M. (2021). A study of job satisfaction and its effect on the performance of employees working in private sector organizations, Peshawar. Education Research International, 2021, 1–9. https://doi.org/10.1155/2021/1751495

Kholiq, D. A., & Miftahuddin, M. (2019). Effect of job embeddedness, job satisfaction, and organizational commitment on employee turnover intention. TAZKIYA: Journal of Psychology, 5(1). https://doi.org/10.15408/tazkiya.v22i1.8154

Lee, S. (2017). Employee turnover and organizational performance in U.S. federal agencies. The American Review of Public Administration, 48(6), 522–534. https://doi.org/10.1177/0275074017715322

McCartney, G., Chi In, C. L., & Pinto, J. S. (2022). Covid-19 impact on hospitality retail employees’ turnover intentions. International Journal of Contemporary Hospitality Management, 34(6), 2092–2112. https://doi.org/10.1108/ijchm-08-2021-1053

Meirina, I., Ferdian, F., Pasaribu, P., & Suyuthie, H. (2018). The influence of work environment towards the turnover intention of employees of 4-star hotels in Padang City. Journal of Business on Hospitality and Tourism, 4(2), 97. https://doi.org/10.22334/jbhost.v4i2.120

Mohammadi, B. (2016). The relationship of role ambiguity with job satisfaction and job performance mediated by proactive behavior. Journal of Ergonomics, 4(1), 20–27. https://doi.org/10.21859/joe-04013

Mohammed, A., Abdulaziz, I. A., & Hananu, B. (2021). Determining job satisfaction of faculty members in the university for development studies: An analysis of Herzberg’s Two-Factor Theory. ADRRI Journal of Arts and Social Sciences, 18(3 (6) October-December), 17-39.

Saeed, R., Lodhi, R., Ahmed, K., Afzal, N., Mahmood, Z., & Ahmed, M. (2013). Work-Life balance and stress with the turnover rate of the employees. World Applied Sciences Journal, 26(6).

Shethna, J., & Thakur, M. (2023, April 24). Why are employees the most valuable intangible assets?: Edu Cba. EDUCBA. https://www.educba.com/employee-most-valuable-intangible-assets/

Siruri, M. M., & Cheche, S. (2021). Revisiting the Hackman and Oldham job characteristics Model and Herzberg’s two-factor theory: Propositions on how to make job enrichment effective in today’s organizations. European Journal of Business and Management Research, 6(2), 162-167.

Spector, P. E. (2022). The nature of job satisfaction. Job Satisfaction, 1–12. https://doi.org/10.4324/9781003250616-1

Spector, P. E. (2022). Environmental and job factors. Job Satisfaction, 47–84. https://doi.org/10.4324/9781003250616-4

Suifan, T., Abdallah, A., & Diab, H. (2016). The influence of work-life balance on turnover intention in private hospitals: The mediating role of work-life conflict. European Journal of Business and Management, 8(20).

Taheri, R. H., Miah, Md. S., & Kamaruzzaman, Md. (2020). Impact of working environment on job satisfaction. European Journal of Business and Management Research, 5(6). https://doi.org/10.24018/ejbmr.2020.5.6.643

Thant, Z. M., & Chang, Y. (2021). Determinants of public employee job satisfaction in Myanmar: Focus on Herzberg’s two-factor theory. Public Organization Review, 21, 157-175.

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Your dissertation literature review base is a brief review of the literature. This brief review of the literature will eventually be incorporated into Chapter 1 and Chapter 2 of your dissertation research document. The Literature Review Base should not be a list of one article summary after another. Rather, use learnings and instructor feedback from Lessons 3 through 6 to present an integrated critical analysis and synthesis of credible literature pertinent to the research area that you have discovered to date.

Instructions
Revisit resources from previous lessons in this course that you feel would be beneficial as a reminder or ones that, perhaps, you have not yet had the opportunity to read.
Revisit your literature search strategy and synthesis matrix.
Consider your instructors’ feedback on previous assignments.
Develop your Signature Assignment using the sections in this lesson’s discussion.

Introduction (Note that in APA formatting, the first section of a chapter is assumed to be the introduction and does not include a heading. Assume this is the beginning of Chapter 2: Literature Review, and do not use a heading.)

The purpose of the introduction section is to briefly orient your reader to the research area. Include only the main ideas essential for the reader to understand the problem that will prompt the research study. Support assertions and information with citations of experts/researchers in the field.

Problem Focus

Research is about exploring problems. Dissertation research studies are prompted by a problem. In this section, identify and document the need for and importance of the problem that necessitates a research study. As you discovered in Lesson 2, the problem focus also guides your literature search. Begin this section with a succinct, concise problem necessitating the need for a research study. Try crafting one sentence that begins with “The problem to be addressed in this study is…”

Provide a minimum of three pieces of evidence demonstrating existence and/or effect of the problem. Evidence of the problem should be as current as possible. This section should not exceed two to three paragraphs. Additional support may be included in your Working Themes section.

Theoretical/Conceptual Framework

The theoretical/conceptual framework provides a lens, or perspective, in which you will explore your focal topic and address the research problem. Clearly state the theory or conceptual framework that you have selected. Describe definitions and concepts of the theoretical/conceptual framework. Provide information on the author, the original intent for the framework, and its use today. Sum this section with thoughts on how the theory or conceptual framework might be applied as a lens with which to understand and explain the research topic.

Literature Search Strategy

Describe your literature search strategy up to this point. Include search parameters such as search terms (combinations of search terms), range of years, types of literature, and search engines/databases. Note: An APA-formatted table with a brief discussion may be used for this section. Follow APA style formatting for tables larger than a single page.

Working Themes

A literature review provides context for the dissertation study through critical analysis and synthesis of prominent literature around the research topic. Prominent works synthesized in this section should be those that address the main ideas around your research topic, describe areas of controversy, and/or perhaps reveal areas of incomplete knowledge. Emphasize themes to build a coherent narrative of the current literature. Themes and/or subtopics will surface through your synthesis. Use these themes/subtopics as headings for this section. Follow APA style formatting for headings.

References

Include a minimum of four new scholarly resources relevant to your selected research topic. Add these to your list of resources. Your reference section should hold a minimum of 25 credible, scholarly resources.

Length: 10 – 15 pages. The recommended length for this lesson’s assignment is, as noted for the previous two assignments, dependent on the number and types of sources that you currently hold.

Additional Resources
Your literature repository (and reference list) should include a minimum of 25 works dedicated to your research study. These works include those that you have acquired throughout this course.