Employee High-Involvement Work Practices and Voluntary Turnover: Does Human Capital Accumulation or an Employee Empowerment Culture Mediate the Process? Examining the Evidence in Canadian Healthcare Organizations

Aim: To independently examine the mediating impact of human capital accumulations and employee empowerment culture on the relationship between high-involvement work practices and voluntary employee turnover. Background: Turnover of nursing staff is a significant issue affecting healthcare cost, quality and access. In the past decade, many healthcare organizations have adopted a variety of high-involvement human resource management (HRM) work practices that aim (in part) to increase employee engagement and commitment to the work enterprise, while lowering employee turnover. High-involvement work practices can include such workplace innovations as: self-scheduling systems, employee suggestion systems, self-managing teams, quality improvement teams, and shared governance arrangements. The mechanism by which high-involvement HRM practices work to reduce voluntary turnover is unknown and requires further elucidation. Two contrasting explanations were examined in this study: a human capital approach which contends that high-involvement work practices lower employee turnover by exploiting the existing knowledge, skills and aptitudes of employees, while an empowerment culture approach predicts that employee participative decision making mediates the relationship between these high-involvement HRM work practices and employee turnover because of its ability to fully engage employees in the work enterprise. Method and Analysis: A questionnaire that measured our study variables was sent to the chief nursing officers of 2208 hospitals and long-term care facilities in every province and territory of Canada, yielding valid responses from 705 establishments. Using employee turnover as the dependent variable, the analysis featured a step-wise Ordinary Least Squares (OLS) regression model that separately assessed the degree of statistical mediation of human capital accumulation as well as employee empowerment culture on high-involvement HRM work practice adoption. Results: After controlling for establishment characteristics and local labour market conditions, the adoption of high-involvement HRM work practices was found to be inversely associated with establishment RN turnover (p<.001), yet explained only about two percent of the total variance in establishment RN turnover. Both nurse human capital accumulation and an employee empowerment culture were found to statistically mediate the relationship, with each independently adding a modest one percent of the variance explained for establishment RN turnover. Implications and Conclusions: The mechanism by which high-involvement work practice adoption impacts employee turnover was examined against two competing explanations. Evidence was found that human capital accumulations mediate this relationship suggesting that these high-involvement practices work to increase employee retention when they enable an organization to better exploit the knowledge, skills and aptitudes of employees. An employee empowerment culture was also found to strongly mediate this relationship suggesting a role for employee participation and engagement in organizational decision making.