Social relationships in the workplace and employee retention
The public sector in New Zealand has experienced, and continues to experience a myriad of internal and external pressures affecting their ability to retain skilled staff. Increasing legislative changes, closer monitoring of organization performance, and the inability to match commercial remuneration combined with the increasing demand for high-skilled labor has created a challenging employment environment for public sector employers. A major component of this problem is not only to attract and select the people with the necessary skills to meet performance expectations, but to retain skilled and professional staff who are already in the organization. The research summarized here stems from a longitudinal action-research study with a Government organization in New Zealand. Over the past five years, the organization has experienced an average turnover rate of 29.4% (excluding redundancies), which is higher than the current public sector standard of 14%. Turnover statistics indicate the average employee stays with the organization for 2 years and 8 months. The purpose of the project was therefore to identify, measure, and monitor those factors which had the greatest impact on employee retention in an increasingly tight labor market for highly skilled and professional employees. Although there has been substantial progress in identifying individual variables that impact on turnover (e.g. Maertz & Campion, 1998), there has been no overarching framework to help mesh the motivations for staying with an organization. The purpose of this research was therefore to simultaneously investigate both turnover and retention factors. A parallel interest in the retention study was whether dissatisfaction with interpersonal relations in the workplace (namely, loneliness) resulted in the employee exiting the organization. Dissatisfied employees tend to withdraw from their organizations, either through psychological disconnection or actual job departure (Hanisch, 1995). Arguably, if an employee feels dissatisfied at work due to emotional or social detachment, it follows that they are likely to psychologically withdraw from that environment. This is particularly notable as both loneliness and organizational commitment appear to have an affective component as their underlying basis. Additionally, Lee, Mitchell and Wise (1996) found an association between interpersonal relationships at work and turnover intentions. It was therefore predicted that loneliness at work would have a negative effect on employee attitudes, instigating a desire to withdraw from the organization.