Does organizational performance affect employee turnover? A re-examination of the turnover-performance relationship

A common problem with using organizational performance as the dependent variable is the ignoring of feedback effect. The current conceptualization of the turnover-performance relationship is mostly unidirectional, focusing on how turnover affects organizational performance. Only a few scholars have investigated the possible reverse relationship between turnover and performance. Aiming to further the research on the feedback effect of organizational performance, this study employed cross-lagged structural equation models that are especially suitable for modelling the possible reverse relationships between variables. Data were collected from public elementary and middle schools in New York City over a three-year period. The results consistently show that organizational performance was negatively related to subsequent employee turnover. This research contributes to the development of a more valid and comprehensive understanding of the relationship between employee turnover and organizational performance.