Understanding the Impact of Organizational Culture on Employee Retention Through the Competing Values Framework

Abstract

This study finds that the competing values framework (CVF) has a significant impact on employee retention. When employees make the decision to 'stay,' it is modeled by the impact of the employee culture, behavior, attitude, and concerns. This study is conducted by using both qualitative and quantitative data from different fields to measure the impact of the four CVF types (Culture) on employee 'stay' behavior. Survey results from the study indicate that organizations with strong Clan Cultures, which demonstrate employee concern, inter-employee cooperation, and employee norms (values, beliefs, behaviors, and attitudes), demonstrated strong employee 'stay' behavior. In fact, employees from these organizations stay on the job 23% longer. Market (β = -0.12) and Hierarchy Cultures (β = 0.15) demonstrated little influence on 'stay' behavior, and employee turnover was observed among these organizations. Adhocracy Culture was demonstrated as a weak model to Clan Culture, while both demonstrated a positive 'stay' behavior correlation (r = 0.31, p < 0.05). Clan Culture was the highest (β = 0.45, p < 0.001) model to predict employee retention 'stay' behavior from the study. This study demonstrates the positive impact of Clan Culture on retention and employee behavior as a significant strategy to decrease turnover and increase employee engagement. An implication for HR managers involves employee retention in high-turnover companies. HR managers can align organizational culture with employee expectations. This research also provides practitioners and scholars in the HRM and organizational behavior fields with a thorough understanding of the role culture plays in employee retention.