Employee Turnover and Organizational Performance: Testing a Hypothesis from Classical Public Administration

Empirical studies of public employee turnover, particularly using turnover as an independent variable, are rare; and most of the literature assumes turnover to have a negative impact on organizations. This study examines a provocative but little supported hypothesis that has recently emerged in the private sector literature—that turnover may provide positive benefits to the organization, at least up to a point. Using data from several hundred public organizations over a nine-year period, we test the proposition that moderate levels of turnover may positively affect organizational performance. We find that while turnover is indeed negatively related to performance for the organization's primary goal, it does have the hypothesized nonlinear relationship for a secondary output that is characterized by greater task difficulty.