This paper aims to examine the economic and psychological mechanisms in turnover at the managerial level. The paper investigates how (1) the ease of moving posed by alternative jobs (i.e. the economic mechanism) and (2) the desire to move due to low job satisfaction (i.e. the psychological mechanism) simultaneously influence top management team (TMT) turnover and these managers' subsequent job position and pay.
Using 25 years of panel data on more than 2,000 top managers in the United States, the paper utilizes fixed-effects logistic regressions and the ordinary least squares model to test the hypotheses.
The authors find that CEO awards (an economic mechanism) and low compensation (a psychological mechanism) independently have positive effects on turnover. Turnover due to the economic mechanism leads to a higher position and pay, whereas turnover due to the psychological mechanism does not guarantee the same outcome. Further, when examining how pay dissatisfaction influences turnover simultaneously with CEO awards, the authors find that managers with the highest pay leave their firm, and not those with the lowest pay.
The paper employs the pull-and-push theory in the employee turnover literature and applies it to the top management team literature. By doing so, this paper contributes original insights to how economic and psychological mechanisms simultaneously affect managerial turnover and its subsequent outcomes.
We are grateful to Theresa Cho for her tremendous help in developing this paper. We would also like to thank Harry Sapienza, Jason Shaw, and Tae-Youn Park for their feedback on previous versions of the paper.
Choi, Y. and Park, N.K. (2020), "Examining the pull, the push, and their simultaneous effects on managerial turnover", Management Decision, Vol. 58 No. 12, pp. 2639-2654. https://doi.org/10.1108/MD-06-2019-0822
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