International Journal of Engineering, Management & Sciences (IJEMS)

ISSN-2348 –3733, Volume-4, Issue-4, April 2017

Employee Attrition Models- A Conceptual

Framework
K. Sreenivas Mahesh

 more significant than efficient and committed manpower. A

Abstract— A growing number of organizations are figuring nation with an abundance of physical resources will not
out on how to win the war for talent. They are committed to benefit unless human resources make use of them (Leon &
keeping their valuable employees because they know that those Megginson, Personnel, 1972). In fact, the human resources
are the people who keep them in business. They realize that if
people stay longer, they get better at what they do, build
are solely responsible for making use of physical and natural
stronger relationships with their most valued customers leading resources and for the transformation of traditional economies
to long-term success in the market place. In this paper, an into modern and industrial economies. In essence, the
attempt is made to know the concept of employee attrition, the difference in the level of economic development of the
models of employee turnover/attrition and measurement of countries is largely a reflection of the differences in quality of
attrition. their human resources. The key element in this proposition is
Index Terms— Employee Attrition, Models of Attrition,
that the values, attitudes, general orientation and quality of
Measurement and Turnover.
the people of a country determine its economic development"
I. INTRODUCTION (Eli Ginzberg, 1980). The shift from manufacturing to service
and the increasing pace of technological change are making
The human resource of an organization represents an human resources, the key ingredient to the nation's well-being
enormous, unrealized potential for profit (Mahesh Kumar, and growth. And in a service-oriented industry the quality,
2004) When put to effective use the physical and financial quantity and utilization of human resources become all the
assets of the organization enables the individuals who more important (Levitan, Garth, Mangum , & Ray Marshal,
together constitute the prime mover of the organization 1972).
towards attainment of corporate objective. The employees One of the legends, Peter Ducker (1979)remarked that,
have been recruited through careful screening and selection whether or not the new economy will emerge, the new society
procedures just like physical assets are planned and acquired, has already emerged... The society comprises people and it is
induction programmes and initial training. They are utilized the people's issues that HR deals with. The winds of change
to provide the desired services. Their performances are raise certain issues: Is there a shift in focus from industrial
monitored. They are maintained through equitable climate to information climate; from restricted market to
compensation; rewards, training and development enable global market; from financial capital to intellectual capital;
them to give continuous and efficient services just like the from brawn work to brain work; from individual brilliance to
physical facilities. It is neither the capital nor material group excellence? The list could go on. The moot point is
resources alone that bring about the development. Primarily what kind of shift is taking place in the 21 stcentury. Is it a
the effective and efficient human resource plays a key role in combination of ail the above-mentioned factors?
increasing productivity, ensuring a fair growth of enterprises, In fact, one of the fundamental activity areas of
and meeting the legitimate needs of workers. Hence management is the management of human resources. Thus,
managing the human resource is considered to be the central, "in the management of four M‟s Money, machines, materials
important and unique management task (Leon & Megginson, and men-it is needless to labor the obvious point that,
1977). considering the nature of man, the management of men... is
Human resources play a crucial role in the development not only fundamental but also dynamic and challenging
process of modern economies. Arthur Lewis observed: (Douglas McGregor, 1971). "Successful management
"There are great differences in development between depends-not alone, but significantly-upon the ability to
countries which seem to have roughly equal resources. So it is predict and control human behavior." Among other things, if
necessary to enquire into the difference in human behaviour a company is economically successful, it means, the
(Arthur Lewis, 1965). It is often felt that, though the management has been able to manage human resources
exploitation of natural resources, availability of physical and
effectively (Dunlop Johan T et al., 1975). The market leaders
financial resources and international aid play prominent roles like General Electric or Microsoft have demonstrated that
in the growth of modern economics, none of these factors is having superior work force is not incidental to business but is
a carefully designed strategy. "The human resources are the
K. Sreenivas Mahesh, Ph. D – Research Scholar, Dept. of Business
active force in industrialization, and strategies for
Management, Yogi Vemana University, Kadapa – 516003, A.P., INDIA. development should concentrate particularly on their

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 Employee Attrition Models- A Conceptual Framework

enhancement. whatever reasons.

Management of human resources includes guiding human Turnover rate can be briefly described as how fast the
resources into a dynamic organization that attains its employers recruit and lose employees (Chikwe, 2009). It is
objectives with a high degree of morale and to the satisfaction used to measure the effectiveness of recruitment (Mondy,
of those concerned with it. Earnest Dale (1965)views 2010) and is sometimes considered as one of the indicators of
management as a process of getting things done through other organizational performance (Cho, Woods, Jang, & Erdem,
people. In fact, it is said that all management is personnel 2006). Mondy(2010) clearly defined turnover rate as how
management as it deals with human beings. Although there many new recruitments were hired to replace resigned
are different functional areas of management like production employees. By these definitions, turnover „occurs‟ only when
management, marketing management, financial management, a replacement is successfully hired.
materials management, all these are to be performed by Turnover can be either voluntary or involuntary. Voluntary
human resources. And, though there is a separate HR turnover happens when the employees initiate the termination
manager, all managers have to manage the human resources of employment regardless the reasons, while involuntary
of their respective functions or departments to get effective turnover happens when a termination is initiated by the
results through managers (Edwin & Flippo, 1976). In short, employers. Involuntary turnover may help improving
all managers are HR managers and all management is productivity because underperforming employees were
essentially human resources management. removed (Davidson & Wang, 2011). Most of the research on
Ducker remarked that assets have shifted from the tangible turnover is devoted to the causes and consequences of
to the intangible forms It implies that companies now invest voluntary turnover (Schneer, 1993).
more in employees rather than in traditional assets like plant The impact of involuntary turnover to the company is
and machinery. In the balance sheet of Microsoft- after all the minimal because it is under employer‟s control. In this study,
assets and liabilities are taken into account there is another only voluntary leave of employees is considered and brought
$350 MN plus in the market value that does not show up in into the discussion of turnover, regardless of whether a
the balance sheet. The surplus market value is the knowledge replacement is successfully prepared or not. To align with
Microsoft employees carry in their heads (Brewster & Wheelhouse‟s (1989) argument, turnover happens only if the
Hegewisch , 1994). left employees must be replaced. Therefore, those temporary
workers who were hired to meet seasonal flow of business are
II. CONCEPT AND MEANING OF EMPLOYEE not a part of in this study.
ATTRITION /TURNOVER
Human capital is the real asset for any organization, and IV. CLASSIFICATION OF EMPLOYEE ATTRITION
this makes the HR role important in recruiting, managing, and Wayne F Cascio and John W Boudreau (2008) introduced
retaining the best. The HR department has a clear role in this two popular ways of classifying employee attritionas
process and determines the success tempo of any voluntary attrition versus involuntary and functional attrition
organization. An urgent priority for most of the organizations versus dysfunctional attrition. Following gives the
is to have an innovative and competent HR pool; sound in HR description of the two types:
management practices with strong business knowledge
A. Voluntary versus Involuntary Attrition:
(Chiamsiri , Bulusu , & Agarwal , 2005).
The success or failure of an organization is largely Employee attrition may be voluntary on the part of the
dependent on the caliber of the people working therein. employee (for example, resignation) or involuntary (for
Without positive and creative contributions from people, example, requested resignation, permanent layoff, retirement,
organizations cannot progress and prosper. Companies have death). Voluntary reasons for leaving such as another job that
realized that competitive advantage resides mostly in people offers more responsibility, returning to school full time, or
and that finding and keeping good managers and employees is improved salary and benefits are more controllable than
a strategic necessity (Kristen B Donahue, 2006). The concept involuntary reasons, such as employee death, chronic illness,
of employer-of-choice has intensified in the last decade. or spouse transfer. Most organizations focus on the incidence
Employees want to work for the best employers. Becoming of voluntary employee attrition precisely because it is more
an employer–of–choice often involves the issue of acquiring controllable than involuntary attrition. They are also
the best talent for the organization, motivating employees to interested in calculating the costs of voluntary attrition,
improve performance, keeping them satisfied and loyal, because when these costs are known, an organization can
developing employees so they can grow and contribute skills, begin to focus attention on reducing them, particularly where
and ultimately retaining those employees (Jack, Philips, & such costs have significant strategic effects.
Adele O Connell , 2008) B. Functional Attrition versus Dysfunctional Attrition:
Employee Attrition can be categorized into functional
III. DEFINITION OF EMPLOYEE ATTRITION
attrition and dysfunctional attrition. Having categorized
Michael Armstrong (2006) defines Employee Attrition as a employee attrition as voluntary, many organizations take the
normal flow of people out of an organization through next logical step; namely, to determine the extent to which the
retirement, career or job change, relocation, illness and so on. voluntary attrition is functional /dysfunctional for the
Jack, Philips and Adele define Employee Attrition as the organization. Employee attrition is functional to the extent
percentage of employees leaving the organization for that the employee‟s departure produces increased value for

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 International Journal of Engineering, Management & Sciences (IJEMS)
ISSN-2348 –3733, Volume-4, Issue-4, April 2017
the organization. It is dysfunctional to the extent that the models invoke the same variables in their description of
employee‟s departure produces reduced value for the turnover.
organization.
B. Mobley (1977) and Modification Models:
V. MODELS OF TURNOVER According to Mobley (1977), there are a series of steps that
lead from job satisfaction to turnover (Figure 2). As seen in
A. March and Simon (1958) model: Figure 2, dissatisfaction with the job leads to thoughts of
One of the earliest models of turnover was developed by quitting, thoughts about the costs of quitting (for example,
March and Simon in 1958 (Hom & Griffeth, 1995). This loss of excellent health benefits), and the expected utility of
model described individuals and organizations as being in a searching for a new job (for example, the probability of
state of equilibrium, where the members contributed to the finding another job within the same salary range). If the cost
organization while the organization provided members with of quitting is not too high and there is a high probability of
compensation in return. March and Simon posited that when finding a comparable job, the individual will search for
the compensation provided by the organization is no longer alternatives, evaluate them, and compare them to the existing
balanced with the contribution of the organizational job. Only if the comparison is favorable towards the
members, individuals quit the organization. This equilibrium alternatives does the individual make the final decision to
between individual contribution and organizational quit the current job.
compensation is a function of two motivational components – This model has attracted a large body of empirical research
perceived desirability of the job and perceived ease of (Coverdale & Terborg, 1980; Hom & Griffeth, 1991; Hom,
movement (Figure 1). Griffeth, & Sellaro, 1984; Miller, Karterberg, & Hulin, 1979) .
Initial studies of this model found that thinking about quitting
has a direct effect on intention to search, and that intention to
search for a new job has a direct effect on intention to quit
(Coverdale & Terborg, 1980; Miller, Karterberg, & Hulin,
1979; Mobley, 1977). These studies also found that turnover
intentions were the best predictor of actual turnover.

Fig 1: March and Simon (1958) Model of Turnover

Elaborating further, they argued that the perceived
desirability of the job is influenced by job satisfaction and
organizational size (because larger organizational size
increases the chances of an intra-organizational transfer).
They also argued that an individual‟s perceived ease of
movement is influenced by the number of perceived
opportunities outside of the organization, which is
determined by the state of the economy, the individual‟s traits
and characteristics, and the number of firms the individual
can access (either through job advertisements or personal
contacts). Even though few studies have directly tested this
model, it has had an influence on many of the following
theories of turnover (Hom & Griffeth, 1991). During the Fig 2: Mobley (1977) Intermediate Linkages Model
remainder of this review, it will become clear that many Other paths, such as expected utility of job search leading
to a job search or intention to quit were not supported

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 Employee Attrition Models- A Conceptual Framework

(Coverdale & Terborg, 1980; Miller, Karterberg, & Hulin, determinants, such as forming close friendships at work,
1979; Mobley, 1977). Mobley, Hand, Baker and earning good and fair compensation, kinship responsibility,
Meglino(1979) modified the original model to include the and training opportunity. However, even with the inclusion
utility of the present job and utility of the future job to the of more than 15 determinants of turnover, these models
employee. A number of studies have investigated these explained only about 13% of turnover variance (Hom &
additions, but the results are inconsistent and provide only Griffeth, Employee Turnover, 1995).
partial support for this model (Griffeth & Hom, 1988;
Michaels & Spector, 1982; Youngblood, Mobley, &
Meglino, 1983). This model is very complex and has not been
tested in its entirety.
Hom, Griffeth and Sellaro(1984) proposed another
modification of the original Mobley model in which
individuals who expect to find alternative jobs easily resign
after deciding to quit without searching for a job (Figure 3).
Hom and Griffeth(1991) used structural equation modeling
(SEM) to compare these models and found the new model to
have a better fit than the original Mobley model. However, a
meta-analysis on all the studies that tested these turnover
models (Griffeth, Hom, & Gaertner, 2000) found that none of
the variables from the above discussed models explained
more than 15% of the variance in turnover.

Fig 4: Price (1977) Turnover Determinants and

Intervening Variables
D. Steers and Mowday(1981) Model:
The Steers and Mowday(1981) model is described in
Figure 8 and includes many of the same factors as the Mobley
et al. (1979) model described earlier. Affective responses
(including job satisfaction as well as organizational
commitment and job involvement) influence desire and
intention to stay or leave. As in other models, desire and
intention to stay or leave directly lead to the individual
leaving or staying (Lee & Mowday, Voluntarily leaving an
organization: An empirical investigation of Steers and
Mowday‟s model of turnover, 1987), but this relationship is
moderated by alternative job opportunities (i.e., if the
individual perceived other attractive opportunities, their
expectations from the job might change). This model
Fig 3: Hom and Griffeth (1991) Alternative Linkage identifies job expectations and values, job performance, and
Model of Turnover organizational experiences as predictors of the individual‟s
affective response to a job. In addition to this basic
C. Price (1977) Model: framework, there are a multitude of factors that influence
In his model, Price identified five primary determinants of these relationships. For example, job expectations are
turnover – pay levels, integration (defined as the involvement influenced by individual characteristics, available
one has in one‟s relationship with a supervisor or coworker), information about the job and organization, and alternative
instrumental communication (defined as how clearly the job opportunities. Finally, once an individual reaches the
work role is communicated to the employee), formal stage where s/he desires to leave, this model suggests that
communication (defined as how well the organizational there are multiple paths the individual might take. S/he might
communicates practices and policies), and centralization resign immediately or start looking for available alternatives
(defined as the distribution of power in the organization). He to the job.
proposed that the first four determinants are positively related A number of studies that tested this model have shown
to turnover while centralization is negatively related to partial support for the model (Stumpf & Hartman, 1984;
turnover (Figure 4). He suggested that these four Hom, Griffeth, & Sellaro, 1984). The only study that tests the
determinants lead to satisfaction, and the relationship complete Steers and Mowday model found that only intention
between satisfaction and turnover is mediated by the to leave predicted actual leaving while alternative job
availability of other work opportunities. Further modification opportunity did not add any significant variance (Lee &
proposed by Price and Mueller (1981) added other Mowday, 1987). Together, both intention to leave and

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 International Journal of Engineering, Management & Sciences (IJEMS)
ISSN-2348 –3733, Volume-4, Issue-4, April 2017
alternative job opportunity accounted for only 5% of the variance in turnover.

Fig 5: Steers and Mowday (1981) Turnover Model

that encourage an individual to stay in a particular job (or

VI.THE JOB EMBEDDEDNESS MODEL OF TURNOVER: hold back an individual from leaving his/her job). Mitchell
Mitchell and Lee (2001) advanced a new approach to and Lee (2001) suggest that an individual‟s decision to leave
turnover that focused on the counter-intuitive notion that an organization is not made in isolation but is shaped by the
individuals might leave the organization for reasons other environment (both work and non-work) in which the
than job dissatisfaction. This approach to turnover focused individual is „embedded.‟ Thus, an individual is „embedded‟
on the factors that make an individual more likely to stay in when s/he has multiple links to people in the organization and
the job, in addition to the factors likely to make an employee community, when the organization and the community are a
leave. This approach built on the earlier turnover models and good fit for the individual, and when the individual has to
added a new dimension to our understanding of turnover. sacrifice a lot to leave the organization and community. In
Mitchell and Lee (2001) suggested that there when this section, the researcher first describes the dimensions of
individuals have multiple attachments to the organization, embeddedness. Then, describe a new addition to the job
these attachments are likely to hold them back from leaving embeddedness model – family embeddedness - that expands
even if they think about leaving due to particular the job embeddedness model to include a new perspective.
circumstances (e.g., getting another offer, company A. Dimensions of Job Embeddedness
relocation to a non-preferred location). Thus, individuals
In the job embeddedness model, both the relationship of
who are high on job embeddedness might choose to stay with
the individual to the organization and the relationship of the
the organization even if circumstances are less than ideal. Job
individual to the community are important predictors of
embeddedness is a multidimensional construct that describes
turnover. Within the organization and the community, an
the various attachments that an individual has with the
individual can have three kinds of attachments: links, fit, and
organization and community (Mitchell, Holtom, & Lee,
sacrifice. Thus, with the two factors (organization and
2001). According to Mitchell et al. (2001), “Embeddedness
community) and the three kinds of attachments (links, fit, and
suggests that there are numerous strands that connect an
sacrifice), the job embeddedness model has 6 dimensions:
employee and his or her family in a social, psychological, and
organization links, organization fit, organization sacrifice,
financial web that includes work and non-work friends,
community links, community fit, and community sacrifice
groups, the community, and the physical environment in
(Figure 6).
which he or she lives” (p. 1104). Put simply, job
embeddedness attempts to capture the totality of the forces

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 Employee Attrition Models- A Conceptual Framework

B. Organization and Community Links sacrifice is the lost opportunity for promotion if the individual
These two dimensions describe the extent to which an is up for a promotion review soon, or the loss of childcare if
individual is linked to other people and activities in the that is one of the benefits provided by the organization. An
organization and community. Links include both formal and example of community sacrifice is leaving a neighborhood in
informal ties that an individual has with other people. One which all the neighbors help each other or leaving a very safe
example of an organization link is a strong connection with neighborhood. According to Mitchell et al. (2001), the more
one‟s supervisor or coworkers. An example of a community an employee would have to give up when leaving, the more
link is a strong connection to a group of friends who spend difficult it would be for him or her to leave the organization
every weekend together, or having relatives who live in the and community.
same area. According to Mitchell et al. (2001), the higher the
number of links between the individual and the organization,
the more s/he is bound to the job and the organization.
Similarly, the higher the number of links between the
individual and the community, the more s/he is bound to the VII.MEASUREMENT METHODS OF ATTRITION
organization.
Michael Armstrong (2006) developed three measurement
methods of employee attrition which are described as given
below:
E. Crude Employee Attrition Rate (BIM Index):
Crude Employee Attrition rate is the number of employees
leaving over a period as a percentage of the average number
employed over the period. This is the most common method
in practice and it is easy to calculate and understand, and can
be used readily for benchmarking.
Here we express attrition as a percentage of the number of
people employed.
This is normally quoted as an annual rate and may be used
to measure attrition per organization, department or group of
employees. The advantage of this index is that it can alert HR
planners to unusually high percentages of the workforce
leaving compared with the HR plan, or with the industry
average, say, which would suggest that something is wrong,
Figure 6 Dimensions of Job Embeddedness or that more effort is needed to retain employees.
C. Organization and Community Fit The disadvantage of this index is that it does not indicate
These two dimensions describe the extent to which the who is leaving the department or organization: even a high
organization and community are perceived as being a good fit turnover rate may not reflect any real instability if the core of
with the individual‟s interests, within and outside of work. experienced staff consistently remains.
Put differently, fit includes the individual‟s compatibility F. Labor Stability Index:
with his or her work and non-work settings. An example of
This is the second method of measuring employee attrition
high organization fit is if the individual values being
environmentally friendly and works for an organization that which focuses mainly on stability.
supports recycling, or if the individual feels s/he is a good fit Here, eliminate short-term employees from the analysis,
with his/her job. An example of high community fit is thus obtaining a better picture of the significant movements in
enjoying music and living in an area that offers a lot of the workforce.
opportunity to watch live bands or being able to join a league The Labor Stability Index value is calculated using the
in the area to play a favorite sport. The better the fit, the more following formula:
an employee will feel professionally and personally tied to the
organization. According to Mitchell et al. (2001), the better
the fit between the employee‟s personal values (e.g. career
Particularly in times of rapid expansion, organizations should
goals and plans for the future) and the organization, the less
likely the employee is to leave. Similarly, the better the fit keep an eye on stability, as a meaningful measure. The
with the community and the surrounding environment, the purpose is similar to the survival index and it provides a
less likely the employee is to leave. simple, if rather limited, basis for measurement.
D. Organization and Community Sacrifice
VIII.SURVIVAL RATE
The final two dimensions of job embeddedness include all
of the benefits that an individual must give up if s/he were to The labor stability index ignores new starts during the year
leave the job. Put simply, it is the perceived loss of material and does not consider service, which may be added to the
or psychological benefits that are currently available or will measurement via length of service analysis, survival rate
be available in the future. An example of organization analysis. Here, the organization calculates the proportion of

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 International Journal of Engineering, Management & Sciences (IJEMS)
ISSN-2348 –3733, Volume-4, Issue-4, April 2017
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