Theoretical Frame Work
The study is guided by theories which explain the impact of employee’s turnover and performance.
Researches on the causes, influences, performance and retention strategies on employees’ turnovers
have been conducted in the past. In support of the findings several theories have mushroomed. Human
capital theory, social capital theory and the expectancy - confirmation theory will be discussed to form a
baseline to the employee turnover and performance in this study.
The Human Capital Theory
Human capital theory was initially formulated by Gary Becker in 1962. He argues that individual
workers have a set of skills or abilities which they can improve or accumulate through training and
education. The human capital refers to sum of human skills and knowledge towards a work process
within an organization. Formal training, education and practice of work experience are thought to
increase human capital. Kacmar.et al., (2006) and Hurley & Estelami (2007) referred the theory to study
the existing relationship on turnover and performance. Federal Enterprise Architecture (2005) reveals
that people are best input since their competence influences the efficiency of inputs. Therefore, the
theory is considered the corner stone of input influencing overall input effectiveness. Hence, human
resource within an organization greatly influences the outputs of other inputs. Armstrong and Armstrong
(2011) conflicts a bit in view that the human resource cannot successfully and have high quality
production without the support of technology but it still stands out that the best technology cannot yield
best as expected if they are operated by incompetent personnel hence peoples’ role being very essential.
Federal Enterprise Architecture (2005) reveals that inputs quality brought to an organization influences
output nature and are characterized by processes and activities. Therefore, quality dimensions, financial
efficiency, productivity and innovational management in an organization system are characterized by
organizational innovations. Kirby (2005) depicts that efficiency in workforce is a building block to
organizational level of outputs. The theory defines outputs as; products, services and facilities that come
up from the organization and outputs as; direct benefits achieved the organization (Federal Enterprise
Architecture (2005). Based on performance reference model, business mission, results and customer
results defines outcomes. Kirby, (2005) reveals customer satisfaction, customer service timeliness
delivery, quality of the service and responsiveness determines the nature of outcomes on customer
results. Human capital theory supports dependent variables in the study in that the loss of accumulated
tacit knowledge will lead to compromised delivery of services, unaccomplished goals, increased
workload and general inefficiency and ineffectiveness within the organization.
The Social Capital Theory
Social capital is most frequently used in a number of researches and the theory was first developed by
James S. Coleman’s in 1988. Coleman defines the concept of social capital as a function, whereby it is
not a single entity, but a variety of different entities having two characteristics in common: They all
consist of some aspect of social structure, and they facilitate certain actions for individuals who are
within the structure.” The social capital theory (Dess & Shaw, 2001; Shaw, Duffy, Johnson & Lockhart,
2005) have an expansion to accommodate the explanation of how turnover negativity affects
performance. Social capital refers to a network of personal interrelationship that can be implemented to
benefit an individual. It gives room for knowledge application and development at large. Knowledge
transfers have been found to occur both formal and informal among individuals in a social network
(Sammarra & Biggiero, 2008). The theory majors on social groups functioning factors that includes
values, trust, cooperation, interpersonal relationship, shared understanding, shared sense of identity
shared norms and reciprocity. The guiding philosophy of the study is social cohesion; being the factors
that bonds groups and organizations together (Corbin, 1999). Social capital broadly refers to those
adequate ingredients of working social gatherings that includes things like relational connections,
mutual personality feelings, shared standards, common understanding, participation, trust, common
understanding, shared qualities, and correspondence.
Lancaster, (2003) reveals that individuals could be willing to share knowledge with trustworthy people
in close social networks. Social capital is dependent of the goodwill that individuals develop between
individuals where an individual contribution at one point expects a return of the favor later (Adler &
Kwon, 2002). The extent of network connection within it defines how best information can be shared.
The social capital and information transaction is lost when individuals leaves the network (Koys, 2001
& Kacmaret al., 2006). Such lines of turnover and performance have been supported by existing
research. Edmondson, (2003) reveals that team membership stability is dependent on faster leaning of
new procedures and skills. Great turnover experienced in teams that took long to learn new procedures
and skills (Edmondson, Winslow, Bohmer & Pisano, 2003) Reagans, Argote & Brooks, (2005) states
that the longer the interaction in network build more qualified individuals and help gain knowledge in
once strengths and weaknesses. The more an organization is dependent on customization of services is
the more the reliance on the tacit knowledge that new individuals would be lacking posing delays and
mistakes in the system (Hausknecht, Trevor & Howard, 2009).
High turnover is the challenge where transfer of tacit knowledge will be low for new individuals due to
low rates of network development. The culture an employee has on developing close working relation
with others build mutual trust, commitment and loyalty (Dani, Burns, Backhouse & Kochar, 2006).
High level of knowledge transfers needs to go handy with level of security and trust (Foos, Schum
&Rothenberg, 2006). Greater knowledge varieties are dependent powerful internal social network
(Wong, 2008). Informational from departed members of the network dissemination is enhanced in the
remaining individuals. Mesmer-Magnus & De Church, (2009) in their research the findings revealed
that when information is shared amongst team members it increases the team performance and
togetherness. Both theories of human capital and social capital supports independent variables and
reveals that turnover causes problems in organization when knowledge is lacking bringing forth the
need for individualization of services to meet customer requests. In case of social capital theory before
new employees develop that that productive social network the organization will have lost in terms
o compromised delivery of services, unaccomplished goals, increased workload and general inefficiency
and ineffectiveness within the organization.
The Expectancy - Confirmation Theory
Victor Vroom is the developer and proponent of Expectancy confirmation theory in 1964. According
to the review of this theory conducted by (Jiang & Klein 2009), the concept behind the Expectation-
Confirmation Theory (ECT) is that, prior to any event, one has an expectation. If that expectation is met
in a positive manner, then one is satisfied. If that expectation is met in a negative manner, then one is
dissatisfied. The Expectancy Theory argues that “both the expectations prior to an event and the
subsequent evaluation after the event combine to determine satisfaction with the event” Vroom, (1964),
as cited by (Jiang & Klein 2009).
The Expectancy Theory supports independent variable in the study which is staff turnover. The theory
claims that “people enter work organizations with expectations and values and if these expectations and
values are met by the organization they will likely remain a member of the organization” Vroom, (1964)
as cited by (Jiang & Klein 2009). Likewise, (Rathakrishnan, Inim, & Kok, 2016). Claims that employees
join the organization with some expectations; thus, negative behaviors such as absenteeism and turnover
intention will occur if those expectations are not met. Reference (Daly & Dee, 2006), identifies The
Expectancy Theory as one of the fundamental theories at the heart of turnover and retention research. In
fact, (Daly & Dee, 2006), provides “additional evidence to support the expectancy theory-based
frameworks that have guided much of the research on turnover intent” as cited by (Daly & Dee, 2006),
in this regard, (Rathakrishnan, Inim, & Kok, 2016). Affirms that turnover intention can be associated
with the expectation of employees on issues such as rewards, training, working conditions
and recognition. In the perspective of the Expectancy-Confirmation Theory, management efforts to
evaluate and satisfy the expectations of their employees can be considered as a retention strategy
especially for talented employees; and this can ultimately counter turnover intentions.
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