Optimal Turnover Rates and Performance in Public Organizations: Theoretical Expectations

Abstract

This paper advances a theory of optimal turnover rates in public organizations. In doing so, we first illustrate how public labor market conditions would affect optimal turnover rates of public organizations. After that, we develop a decision-theoretic model of public managers to show when turnover incurs costs or benefits to organizations. We also propose a set of testable propositions for future scholars, which posit the turnover-performance relationships being conditioned on various individual, organizational, and environmental contextual factors. We provide suggestions for empirical applications of the theory.

Keywords: Employee Quality, Optimal Turnover Rates in Public Organizations, Public Sector Labor Market, Turnover-Performance Dynamics