Motivating and Retaining Government Employees: The Role of Organizational Social Capital

While a great deal of attention has been given to the role of performance pay and extrinsic rewards in understanding how to motivate and retain employees, this study points towards the importance of organizational social capital, defined as the sum of collaboration, trust, and value congruence among employees. Using a four-year panel data set of 170 federal agencies, we find a positive effect of social capital on intrinsic motivation but contradicting effects on turnover. Changes in social capital across time mitigate turnover intention but are unrelated to turnover behavior. A cross-sectional analysis shows, however, that the relationship between social capital and turnover behavior is curvilinear and has an inverted u-shape. The findings suggest that social capital can be a double-edged sword, as it is harmful in lower doses but beneficial if a critical mass of employees can participate in the social network, thereby avoiding conflict-laden in- and out-group constellations.