Management
Guarding Against Turnover Contagion
Organizations want strong leaders. But when they exit, loyal employees often follow them out the door. New research shows how to halt the exodus.
Aug 31, 2017

Guarding Against Turnover Contagion

As Featured In 
Academy of Management Review

A 360-degree Approach Can Anchor Teams

Organizations need strong leaders who can build high-quality relationships with their subordinates. But the same leaders create a liability when they exit because loyal employees will often follow them out the door. The result can be “turnover contagion.”

The opposite happens when bad leaders depart. Employees are more likely to celebrate. So what’s an organization to do? Research by four authors, including professors Debra L. Shapiro and Rajshree Agarwal at the University of Maryland’s Robert H. Smith School of Business, explores ways to anchor employees to their organizations so they don’t want to leave.

The key is to invest in organization-wide developmental climates that feature developers at all levels — top-down, laterally and bottom-up — so employees never depend too much on any one person for their support. “A 360-degree relational perspective means that developers may not necessarily be authority figures or even people more senior in the organization,” Shapiro says.

Learning cultures like this don’t happen by accident. Shapiro says organizations must work to align their incentives, rewards, training programs and performance appraisal systems to encourage a range of multidirectional developmental activities. Organizations must also promote many development roles, including but not limited to mentor, coach, sponsor and friend.

Nothing lasts forever, including the tenure of a great leader. “It’s natural for great leaders to move on to other career opportunities,” Shapiro says. “But losing strong leaders admired and trusted by their employees need not weaken organizational attachment.”

Read more: How do leader departures affect subordinates’ organizational attachment?: A 360-degree relational perspective is featured in the Academy of Management Review.

About the Author(s)

Rajshree Agarwal is the Rudolph P. Lamone Chair and Professor in Entrepreneurship at the University of Maryland and director of the Ed Snider Center for Enterprise and Markets. Rajshree’s research interests focus on the implications of entrepreneurship and innovation for industry and firm evolution. Her recent projects examine the micro-foundations of macro phenomena, linking knowledge diffusion among firms, industries, and regions to the underlying mechanisms of employee entrepreneurship and mobility.

ShapiroDebra

Debra L. Shapiro (Ph.D. Northwestern U) is the Clarice Smith Professor at the U of Maryland (UMD), formerly the Willard Graham Distinguished Professor at UNC-Chapel Hill where she was 1986-2003. Debra has led UNC's and MD's business schools' PhD Programs (as Associate Dean at UNC from 1998-2001 and UMD from 2008-2011).

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