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Article published on Liu and Raghuram research

Article published on Liu and Raghuram research

April 28, 2016

Read the original story here.  

April 27, 2016

UNIVERSITY PARK, Pa. -- Even though saying farewell to departing employees is a more frequent occurrence in today's high-turnover industries, researchers suggest that leaders should maintain good relationships with these workers as they exit.

"When we, as researchers, study organizations, or even when we study how managers look at employees, we see that businesses often assume that the relationship terminates when a person leaves the organization," said Sumita Raghuram, associate professor, human resource management, Penn State. "However, in our research, we extend the employment boundary outside of the organization. We believe that the relationship does not end there and you have to be mindful of the people who actually left the organization."

In a study, workers who had good relationships with their bosses carried that goodwill into their new jobs, which could lead to important benefits for their former workplaces, according to the researchers.

"These ex-employees, who we call organizational alumni, can be very important for you," said Raghuram. "They are the ones who can be your ambassadors."

She added that workers who felt good about their former employers could become future customers and could also relay new business knowledge and insights back to their old employers.

"They can also come back to work for you as boomerang employees," Raghuram said. "They are a very powerful force and we cannot ignore that."

One way to increase this alumni goodwill is to make a good effort to retain employees when they announce a pending departure, according to the researchers, who released their findings in a recent issue of Personnel Psychology.

"When an employee quits they are sensitive to how they were treated when they left the organization. For example, did anyone care to tell them that they will be missed, or try to stop them from leaving by offering genuine inducements?" Raghuram said. "What we find, once again, is that a strong retention effort can reinforce the effect between relationships with bosses and alumni goodwill."

The researchers also found that employees may actually be leaving their companies because good relationships with their bosses helped them build up their capabilities. Those improved skills can help them land better jobs with higher salaries than the positions they quit.

The researchers collected data from employees of a global information technology firm headquartered in India. A total of 128 employees were tracked over an 18-month period, which included time that they were employed and after they quit the company.

During the interviews, the former employees were asked their opinion of their former employers, whether there were efforts to retain them, their experiences when they left and details about their new jobs.

Raghuram worked with Xiangmin Liu, assistant professor of human resource management, Penn State and Ravi Shanker Gajendran, assistant professor of business administration and Deepak Somaya, associate professor of business administration and Stephen V. and Christy C. King Faculty Fellow, both of University of Illinois at Urbana-Champaign.

The Society for Human Resource Management and the Indian School of Business Visiting Scholar Program supported this work.