IIMB Management Review (2010) 22, 102e110

available at www.sciencedirect.com

journal homepage: www.elsevier.com/locate/iimb IIMB INDIAN INSTITUTE OF MANAGEMENT

BANGALORE

Relationship between psychological climate and

turnover intentions and its impact on organisational
effectiveness: A study in Indian organisations
Soumendu Biswas*

Human Resource Management, Management Development Institute, Gurgaon, India

Available online 11 June 2010

KEYWORDS Abstract Studies pertaining to human resource management in India reveal a variety of
Psychological climate; factors that affect employees’ attitude towards their job, including their perception of their
Job satisfaction; job environment, or the psychological climate. The present study posits the two attitudinal
Job involvement; variables of job satisfaction and job involvement as mediators between psychological climate
Turnover intention; and employees’ turnover intentions and extends it to their impact on organisational effec-
Organisational tiveness. Data collected from 357 managers/executives was subjected to multivariate data
effectiveness analysis. The results established that psychological climate is a statistically significant
predictor of organisational effectiveness and that job satisfaction and job involvement are
important mediators in transmitting the influence of the predictor variables to the criterion
variables.
ª 2010 Indian Institute of Management Bangalore. All rights reserved.

Introduction processes and rigid practices (Biswas & Varma, 2007).

Before the introduction of the New Economic Policy in
1991, the Indian business environment was distinguished
by the dominance of large firms in the manufacturing
sector, which were usually marked by mechanistic
* Tel.: þ91 124 4 4560297; fax: þ91 124 2341189.
E-mail address: sbiswas@mdi.ac.in
0970-3896 ª 2010 Indian Institute of Management Bangalore. All
rights reserved. Peer-review under responsibility of Indian Institute
of Management Bangalore.
doi:10.1016/j.iimb.2010.04.013
Firms belonging to the service sector such as educational
institutions, healthcare organisations, and media and
communications were basically owned by the state. This
was a direct consequence of the Nehruvian welfare
philosophy that emphasised pluralistic utilitarianism. The
fallout of such a socio-political arrangement was the lack
of emphasis on individual behavioural aspirations (Varma,
Budhwar, Biswas, & Toh, 2005). Thus, till the privatisation
of the Indian economy in the early 1990s, Indian organi-
sations were extremely bureaucratic and were charac-
terised by one-way flow of decision making from the top
to the bottom, which is not uncommon in social cultures
dominated by collectivism and high power distance norms
(Hofstede, 2001).
However, with the liberalisation of the Indian business
environment, managerial practices, especially those
related to the cognitive and affective facets of individual
employees at the workplace, underwent major
Relationship between psychological climate and turnover intentions
alterations. Furthermore, human resource (HR) practices
in Indian firms have experienced a sea change, as
contemporary HR policies and practices are designed in
a manner that promotes individual involvement on-the-
job and encourages extra-role behaviour in addition to the
in-role behaviour of employees (Biswas, 2006; Budhwar &
Khatri, 2001; Pattnaik & Biswas, 2005). As Biswas and
Varma (2007; p. 666) observed, ‘HR practices in India are
increasingly geared towards improving the way individual
employees perceive their day-to-day working environ-
ment, or the way they perceive the psychological climate
in the workplace’.
In such a context, it becomes necessary to investigate
the variables that are related to an individual’s perception
of his/her immediate workplace atmosphere based on his/
her everyday experiences (Schneider, 1975; Strutton,
Pelton, & Lumpkin, 1993). In this regard, it is worth noting
that the relevant literature recommends the examination
of psychological climate as a primary antecedent of
a variety of individual-level outcomes such as job satis-
faction, job involvement, and turnover intentions (James,
James, & Ashe, 1990; Parker et al., 2003; Woodard, Cas-
sill, & Herr, 1994). This paper seeks to empirically
examine these theoretical suggestions in the context of
the Indian management scenario. The rest of the paper is
organised as follows: the next section surveys the litera-
ture and generates a number of hypotheses on the rela-
tionship between the constructs studied. The third section
describes the methodology used in the study and the
fourth section presents the results of the analysis. The
discussion and conclusions are presented in the fifth
section.
Literature review and hypothesis generation
Job satisfaction has been defined as ‘a pleasurable or
positive emotional state resulting from the appraisal of
one’s job or job experience’ (Locke, 1976; p. 1300). Wanous
and Lawler (1972) identified several different operational
definitions of job satisfaction examining different facets of
job satisfaction and their combined effect in providing
a general understanding of the job satisfaction construct.
Job satisfaction has been found to be a multidimensional
construct manifesting the emotional evaluations of indi-
viduals regarding their expectations and how well they have
been met. Schnake (1983) conceptualised three dimensions
of job satisfaction representing intrinsic, extrinsic, and
social aspects of job satisfaction. In effect, Schnake’s
(1983) dimensions of job satisfaction cover cognitive and
affective responses made by individuals in connection to
their work environment.
Additionally, several studies reported that job satisfac-
tion successfully predicted turnover intentions (Baysinger &
Mobley, 1983; Farrell & Rusbult, 1981; McEvoy & Cascio,
1985; Mobley, 1982; Price & Mueller, 1981; Steers & Mow-
day, 1981). Mobley, Griffeth, Hand, and Meglino (1979)
highlighted the fact that job satisfaction was one of the
important variables in explaining turnover intentions among
employees. In their meta-analytic review, Cotton and Tut-
tle (1986) reported a negative relationship between job
satisfaction and turnover intentions.
103
According to the literature, job involvement is
a construct that arises out of interactions between indi-
vidual disparity in sensitivity to the work settings and
personality traits (Ruh, White, & Wood, 1975; Sandler,
1974; Schein, 1983). According to Lodahl and Kejner (1965),
job involvement affects people for whom their job consti-
tutes the most important part of their lives. Thus, job
involvement can be conceptualised as ‘the degree to which
a person identifies psychologically with his work or the
importance of work in his total self image’ (Lodahl & Kej-
ner, 1965; p. 24). Hence, job involvement appears to be
a construct that follows directly from the way individuals
are affected by their immediate work environment and
interpersonal relationships (Ruh et al., 1975).
An employee’s intention to continue or quit an organi-
sation has been a topic of considerable interest in the
literature pertaining to organisational behaviour, particu-
larly in connection with organisational commitment, job
satisfaction, job involvement, and extra-role behaviour
(Baysinger & Mobley, 1983; McEvoy & Cascio, 1985; Staw,
1980). Given that attitudinal variables such as organisational
commitment, job involvement and job satisfaction are
outcomes of appropriate or inappropriate HR practices, it is
not farfetched to assume that the HR practices of an orga-
nisation shall dictate an individual’s decision to stay or quit
an organisation (Blau & Boal, 1987; Joyce & Slocum, 1984;
Koys, 2001; McEvoy & Cascio, 1985; Staw, 1980).
Furthermore, Baysinger and Mobley (1983; p. 281)
observed that ‘the act of quitting an organisation occurs at
a specific point of time’. While reviewing the socio-
psychological perspectives of employees’ intention to stay
or quit an organisation, a substantial body of literature
indicated that the intention to quit an organisation may be
a significant response to stress factors arising out of
incongruence between an individual’s psychological
perception about his/her job environment on the one hand
and his/her needs and aspirations on the other, mediated
by an individual’s attitudinal facets such as level of
involvement and satisfaction with his/her job responsibili-
ties (Mobley, 1982).
Researchers in organisational sciences acknowledge
that the central theme of organisational theory pertained
to organisational effectiveness (Goodman & Pennings,
1977). However, the main constraint in conceptualising
effectiveness was that historically, it was a problem-
driven rather than a theory-driven construct. This implies
that a single theory regarding organisational effectiveness
was hard to come by. Another difficulty in conceptualis-
ing organisational effectiveness emerging from the rele-
vant literature review was the array of criteria under
which it was studied. Campbell (1977), for example, lis-
ted some thirty criteria to describe organisational
effectiveness.
In general, organisational effectiveness was defined as
the degree to which an organisation attains its short-term
and long-term goals, the selection of which reflects stra-
tegic constituencies, the self-interest of the evaluator, and
the life-stage of the organisation (Robbins, 2001). As far as
the relationship between organisational culture and
organisational effectiveness was concerned, it was argued
that organisations possessing a strong culture that was
congruent with their top management leadership style,
104
Job
H1 H3
(+) satisfaction (-)
H5
(-)
Psychological
Turnover Organisational
climate
effectiveness
intention
H2
H4
(+)
(-)
Job involvement
Figure 1 The path model associating the latent constructs of
organisational effectiveness.
organisational structure and internal management
practices attained higher levels of effectiveness than
their competitors (Arogyaswamy & Byles, 1987; Robbins,
2001).
Based on the discussion above, five hypotheses were
postulated. These hypotheses, labeled H1 to H5 are pre-
sented schematically in the path diagram in Figure 1.
Method
Data collection procedure
The respondents were 357 executives/managers from
different organisations. A covering letter describing the
reason for the study was attached with each questionnaire.
The letter gave details about the voluntary and anonymous
nature of the study. Furthermore, participants were assured
that the responses would be used only for research purposes.
The questionnaires, when completed, were returned to the
researcher via mail, in pre-stamped envelopes.
Sample
Of the 357 participants, 180 (50.42%) belonged to
manufacturing sector companies, while 177 (49.58%)
belonged to service sector organisations. Moreover, 83.9%
of the survey participants were males, while 16.1% were
females. The average age of the participants was 36.9
years. The average weekly hours spent by the participants
at work was 52.4, and their average length of work expe-
rience was 10.7 years. Finally, 7.3% of those surveyed
belonged to senior management, 35.6% were from middle
management, and 57.1% reported working at junior
management levels.
Measures
Psychological climate
This was calculated using the Psychological Climate
Measure as reported by Brown and Leigh (1996). This scale
comprised six factors, namely, supportive management,
role clarity, contribution, recognition, self-expression, and
challenge, and included 21 items. The Cronbach alpha (a)
for this scale was .90.
Job satisfaction
An 11 item instrument was used to measure job satisfaction.
The instrument covered three dimensions of satisfaction,
S. Biswas
namely, intrinsic, extrinsic, and social satisfaction as repor-
ted by Schnake (1983). Three items were used to measure
extrinsic satisfaction, four items to measure intrinsic satis-
faction, and four items were used to measure social satis-
faction. The Cronbach’s alpha for this scale was .90.
Job involvement
This was measured using four items of the Job Attitude
Scale as developed and reported by Lawler and Hall (1970).
The scale measured the affective attachment of individuals
with their job. The Cronbach’s alpha of the responses to
this scale was .82.
Turnover intention
Four items measured turnover intention (O’Reilly, Chat-
man, & Caldwell, 1991). The Cronbach’s alpha was .70.
Organisational effectiveness
The measure of organisational effectiveness was the eight-
item scale used by Mott (1972). The scaling of the items was
different as each question needed a different adjective as
its response. The Cronbach’s alpha was .88.
Data analysis technique
The Statistical Package for Social Science version 10.0 (SPSS
10.0) and the Analysis of Moments Structure (AMOS 4.0) were
used to analyse the data. The statistical analyses included
a measurement and a structural equation model (SEM). The
path model based on the hypotheses emerging out of the
review of literature was subjected to structural equation
analysis and fit tests. The criteria for fit were the normed
Chi-square (c2/d.f.), the goodness-of-fit index (GFI), the
comparative fit index (CFI), and the root mean square error
of approximation (RMSEA) (Arbuckle & Wothke, 1999).
Moreover, since the reliabilities of the study variables were
all greater than the inter-variable correlations, it could be
concluded that they represented distinct constructs.
Common method bias
It was noted that since the respondents providing the
measures for the variables are the same, the study may
potentially suffer from the problem of common method
bias (Podsakoff, MacKenzie, Lee, & Podsakoff, 2003). As
a result, Harman’s single-factor test was conducted to
address this concern. Accordingly, all the items from all
the constructs in the study were included in a factor
analysis to determine whether a single-factor claimed
a disproportionately large variance. A scrutiny of the
results of the test showed that there was no general
factor that accounted for a majority of the variance. As
such, it was concluded that common method bias was not
present in this study.
Results
Table 1 presents the means, standard deviations, correla-
tions, and reliability indices for the key variables of
this study. It may be noted that the key variables
were significantly correlated: psychological climate and job
satisfaction (r Z .63, p  .01); psychological climate and
Relationship between psychological climate and turnover intentions
Table 1 Descriptive statistics, correlations, and reliability indices for key variables (N Z 357).
Mean Standard deviations
1. Psychological climate 3.65 .53
2. Job satisfaction 3.40 .65
3. Job involvement 3.52 .60
4. Turnover intention 2.78 .73
5. Organisational effectiveness 3.51 .63
*p  .05; **p  .01 values in parentheses represent Cronbach alpha.
job involvement (r Z .48, p  .01). Similarly, job satis-
faction was significantly correlated with turnover inten-
tions (r Z .17, p  .01) and job involvement was also
significantly correlated with turnover intentions (r Z .14,
p  .01). Finally, the correlation between turnover inten-
tion and organisational effectiveness was also found to be
significant (r Z .19, p  .01)
Discriminant validity of the organisational
citizenship behaviour (OCB) and in-role
performance constructs
Prior research provides evidence of the distinctiveness of
psychological climate, job involvement, and job satisfaction
indicators. Yet, because of the near-similarity of wordings of
the items measuring the employees’ ratings of the
constructs, a confirmatory factor analysis was conducted to
examine whether psychological climate, job involvement,
and job satisfaction are distinct. AMOS software (version
17.0; Arbuckle & Wothke, 1999) was used to compare the fit
of two nested models: a one-factor model incorporating the
three constructs and a three-factor model distinguishing
psychological climate, job involvement, and job satisfac-
tion. Based on the sequential chi-square difference test
(James, Mulaik, & Brett, 2006), the three-factor model, c2
(d.f. Z 87, N Z 357) Z 477.26, p  .01 fitted the data
significantly better than the one-factor model, c2 (d.f. Z 90,
N Z 357) Z 754.94, p  .01; c2diff (1, N Z 357) Z 277.68,
p  .01. Compared to the one-factor model, the three-factor
model also had better indices with the CFI (.69 vs. .98), the
GFI (.73 vs. .96), and the RMSEA (.11 vs. .05) showing better
fit for the latter. Therefore the three constructs that is,
psychological climate, job involvement, and job satisfaction
were adjudged as distinct.
In order to examine the causal linkages, multiple
regression analyses were conducted on the variables
included in this study. Table 2 shows the standardised
regression estimates between the key constructs. As shown
in the table, job satisfaction was significantly influenced by
psychological climate (standardised b Z .77, p  .01) and
Table 2 Standardised regression estimates between the key constructs.
Psychological climate / job satisfaction
Psychological climate / job involvement
Job satisfaction / turnover intention
Job involvement / turnover intention
Turnover intention / organisational effectiveness
105
1 2 3 4 5
(.90)
.63** (.90)
.48** .46** (.82)
.20** .17** .14** (.70)
.51** .58** .43** .19** (.88)
job involvement was significantly and positively predicted
by psychological climate (standardised b Z .55, p  .01).
On the other hand, job satisfaction negatively and signifi-
cantly affected turnover intentions (standardised
b Z .32, p  .01) and job involvement also negatively and
significantly effected turnover intentions. (standardised
b Z .21, p  .05). Finally, it was found that turnover
intentions as hypothesised, had a significant negative
impact on organisational effectiveness (standardised
b Z .49, p  .01). The standardised regression coeffi-
cients are depicted in Figure 2 below.
In order to calculate the fit indices that explained the
relationships between the hypothesised paths among the
latent constructs, AMOS 4.0 SEM procedures (Arbuckle &
Wothke, 1999) were used. The present study used the
maximum likelihood estimation (MLE) algorithm to deter-
mine the fit indices. Accordingly, the GFI and the RMSEA
were reported as the absolute fit measures. According to
Byrne (2001), absolute fit measures should be used for
comparison between the hypothesised model and an
absence of any other model. The other measures which
were also reported were the Tucker-Lewis Index (TLI) and
the CFI. These indices indicated a comparison between the
hypothesised model and the model with maximum
constraints. Finally, the normed chi-square value was also
used as an acceptable measure of fit.
Table 3 shows the fit measures of the proposed model.
For the model as depicted in Figure 1, the normed c2 value
is 2.42. The GFI is .91. The TLI is equal to .91, the normed
fit index (NFI)) value is .88, and the CFI value is .93. With
the threshold value of RMSEA being .07, the value of RMSEA
for the proposed model is .06. Finally, the adjusted good-
ness-of-fit index (AGFI) and the parsimonious goodness-of-
fit index (PGFI) values are equal to .88 and .66 respectively,
thus confirming a good fit of the model.
Mediator analysis
The history of mediator analysis is quite long and significant
in the area of social science research (Alwin & Hauser,
Standardised b Critical ratio
.77 9.15
.55 7.75
.32 3.85
.21 2.72
.49 5.19
106
Job
77** satisfaction
-.32**
Psychological
Turnover
-.49**
climate
intention
.55**
-.21**
Job involvement
Figure 2 The standardised regression coefficients.
1975; West & Wicklund, 1980). In this article, mediator
analysis followed the guidelines proposed by the relevant
literature in this area (Baron & Kenny, 1986; MacKinnon,
Warsi, & Dwyer, 1995). With the aim of placing affective
commitment as the mediator variable, the following two
conditions were taken into account: (i) whether the direct
path from the antecedent to the consequents were greater
than the paths under the condition of mediation; and (ii)
whether the direct path from the predictors to the criteria
under the mediated condition was significant.
Since, condition (i) was negative and condition (ii) was
positive, the results showed that affective commitment is
a full mediator between the predictor, i.e. psychological
climate and the criteria variables, i.e. job involvement and
organisational citisenship behaviour. These results are
presented in Table 4 below.
Analysis of reverse causality
Notionally, statistical analysis using SEM procedures
implicitly assumes causality drawn from theoretical prem-
ises. In keeping with this line of reasoning and drawing upon
relevant organisational literature, the direction of associa-
tion between the study constructs have been framed which
gave rise to the proposed model. However, to statistically
support this conceptual conjecture the proposed model was
compared to the alternate model wherein the direction of
causality was reversed (Figure 3). It may be noted here that
the variables identified as exogenous and endogenous in the
proposed model were marked as endogenous and exogenous
respectively in the alternate model. The comparison
showed a discrepancy in the fit indices between the two
models in favour of the proposed model vis-à-vis the alter-
nate model. The results are displayed in Table 5.
Discussion and conclusion
The results of the regression and the SEM procedures justify
the acceptance of the first hypothesis that is, psychological
Table 3 Fit indices of the proposed model.
Fit indices GFI AGFI
Proposed model .91 .88
Independence model .37 .30
GFI: goodness-of-fit index; AGFI: Adjusted goodness-of-fit index; PGFI: Parsimonious goodness-of-fit index; TLI: TuckereLewis Index;
NFI: Normed fit index.
CFI: comparative fit index; RMSEA: root mean square error of approximation.
S. Biswas
climate will have a significantly positive influence on job
satisfaction. Theoretically, an individual’s behaviour is
affected by events in the external environment and in this
Organisational context individual outcomes are going to be predicted by
effectiveness psychological perceptions rather than objective realities.
These individual outcomes also include job-related
outcomes such as work performance (James, Hater, Gent,
& Bruni, 1978).
Interestingly, psychological perceptions of one’s imme-
diate work environment or in other words, psychological
climate, were once viewed as synonymous with the job
satisfaction construct (Johanneson, 1973). However, low
inter-correlation between them has placed psychological
climate and job satisfaction as distinct concepts which led to
the formulation of the first hypothesis of the present study.
Furthermore, the implications of the acceptance of the
first hypothesis are that job clarity, task control, manage-
ment control, and task reward and recognition, which are
dimensions of psychological climate, play an important role
in determining the job satisfaction of an employee. This
viewpoint is corroborated by earlier studies, too (Futrell,
Swan, & Todd, 1976; Todd, 1973).
From a practical point of view it is important for managers
to be aware of employees’ perceptions about work realities.
It is therefore an imperative that managers design their
subordinates’ work responsibilities in such a manner that
there are fewer stressors and a greater amount of challenge,
rewards, and recognition. Moreover, with psychological
climate proving to be a significantly positive predictor of an
attitudinal factor like job satisfaction, it further underscores
that support and sincerity in supervisor-subordinate and
peer-related relationships enhance an individual’s level of
job satisfaction. Cohesion among organisational members is
also an important underlying factor in increasing an
employee’s job satisfaction. Essentially, these factors of
psychological perception improve an individual’s job satis-
faction by augmenting his/her social satisfaction.
Apart from social satisfaction, the present study also
took into consideration intrinsic and extrinsic factors of job
satisfaction. Indeed, the results of the present study show
that innovativeness and challenge, external and internal
recognition of work, and managerial impartiality, all of
which represent dimensions of psychological climate, boost
individual job satisfaction level. This contention is sup-
ported by previous literature, too (Montes, Fuentes, &
Fernandez, 2003).
The results and analysis of the data collected for the
present study also led to the acceptance of the second
hypothesis which stated that psychological climate will
have a significant and positive impact on job involvement.
In this study, psychological climate was conceptualised at
both the unit-level and the individual-level. At both levels,
PGFI TLI NFI CFI RMSEA Normed c2
.66 .91 .88 .93 .06 2.42
.33 .00 .00 .00 .21 16.75
Relationship between psychological climate and turnover intentions 107

Table 4 Analysis of job satisfaction and job involvement as mediator variables.

Whether (direct path) > Whether (direct Results of the % of
(direct path under path under mediator analysis explained
mediated condition)? mediated condition) mediation
is significant?
Psychological climate / job Yes Yes Job satisfaction 32.97
satisfaction is a quasi-mediator
/ Turnover intention
Psychological climate / job Yes Yes Job involvement 18.24
involvement is a quasi-mediator
/ Turnover intention
Job satisfaction / Turnover Yes Yes 5.50
intentions
/ Organisational
Turnover intention
effectiveness
is a quasi-mediator
Job involvement / Turnover Yes Yes 16.84
intentions
/ Organisational
effectiveness

the commonality lies in that managerial policies, practices,
and processes are based on the same individual’s psycho-
logical perception (Schulte, Ostroff, & Kinicki, 2006). In this
connection, job involvement is conceptualised as the
extent of an individual’s psychological identification with
his/her job. Hence, the acceptance of the second hypoth-
esis stands conceptually justified. The theoretical implica-
tion of this statement is that the amount of involvement an
individual will have with his/her job will depend upon the
affirmative strength with which he/she psychologically
perceives the various facets of his/her job and job envi-
ronment. Additionally, a positive view of an employee’s
immediate work environment would build up both discre-
tionary as well as non-discretionary role perceptions. It
would make work more meaningful and rewarding for the
individual employee. The above discussion clearly demon-
strates the theoretical underpinnings of the second
hypothesis.
From a practical perspective, the results indicating
support for the positive influence of psychological climate
on job satisfaction point to the need to clearly define
managerial processes for the benefit of the employees; not
only the overall management policies but also the imme-
diate job-related details of an employee that would lead to
an intensification of role and goal clarity and instil in the
individual a greater sense of psychological fulfilment in
discharging his/her role responsibilities. In the process,
employees will also be able to develop sense and meaning
in their work and work environment.
Job
satisfaction
Psychological
climate Turnover
intention
Job involvement
Figure 3 The alternate model.
In this context, managers should be especially attentive
towards framing subordinates’ performance requirements
and standards. When subordinates perceive that their job is
innovative and challenging, there is process clarity, greater
identification with the job and a heightened level of job
involvement.
As evident from Table 2, the regression results support the
third hypothesis that job satisfaction will have a significantly
negative effect on turnover intention. This outcome in fact,
has been endorsed by earlier studies (Freeman, 1978; Shields
& Price, 2002). The implication of this result is that the
complexity of the work environment, if perceived in
a favourable light would increase an individual’s job satis-
faction. Thus, job satisfaction forms a central factor in
whether an individual identifies with his/her job and by
extension, with his/her organisation. Thus, the greater the
job satisfaction of an employee extrinsically, intrinsically
and socially, the higher the level of organisational identifi-
cation and commitment. Evidently, such an attitude would
encourage the individual to continue with the organisation
and restrain his/her turnover intention.
From a practical viewpoint, managers should create such
an environment through job design and managerial
processes such as organisational communication and human
resource policies and practices so as to make employees
access information easily, reduce stress, and on the whole
make the whole work experience more pleasurable and
fruitful. It is further suggested that employers should
create policies and practices that encourage participatory
decision making and improve the sense of employee
ownership of business. This would further improve
employees’ engagement with their roles and their
requirements. However, a rider here is that the process of
favourable job designing should factor in the cultural
Organisational
effectiveness aspects of social life. Organisations are after all, a part of
the overall societal framework and rules and norms should
be in keeping with accepted cultural mores.
The results of the study also support the fourth
hypothesis of the study that is, job involvement shall be
a significantly negative predictor of turnover intention.
108 S. Biswas

Table 5 Fit indices of the alternate model.

Fit indices GFI AGFI PGFI TLI NFI CFI RMSEA Normed c2
Proposed model .82 .79 .69 .83 .79 .84 .08 3.05
Independence model .28 .23 .26 .00 .00 .00 .18 12.95
GFI: goodness-of-fit index; AGFI: Adjusted goodness-of-fit index; PGFI: Parsimonious goodness-of-fit index; TLI: TuckereLewis Index;
NFI: Normed fit index; CFI: comparative fit index; RMSEA: root mean square error of approximation.

Theoretically, this implies that when employees get
familiar with the nuances of their job responsibilities, they
start relating themselves to it. Under the circumstances,
they are involved with their in-role and extra-role
requirements in equal measure. In such a situation, it
becomes difficult for individuals to break from the routine
and engage themselves in another workplace setting. Since
these employees perceive themselves to be in a favourable
position, they wish to maintain their status quo. As such,
turnover intentions of these employees become low or
negligible. This bears out Campbell and Campbell’s (2003)
contention that the job content facets of an individual’s
work life form the most important group or organisational
level contextual factor.
Turnover intentions reflect a degree of dissatisfaction and
disenchantment on the part of the individual. Given the
contemporary turbulence in the global economic environ-
ment, lack of proper information, rumours and negative
anticipation may reduce job satisfaction and job involve-
ment of employees. This may increase their turnover inten-
tions and thus create a band of transient employees. In this
connection, it is important for the management to maintain
an open system of communication and promulgate shared
decision making procedures so as to allay unexplained
apprehensions, channelise employee attitudes and endeav-
ours towards a more fruitful path of person-organisation goal
congruence, and reduce turnover intentions through better
policies and practices of human resource management.
Finally, the results of the data analysis procedures led to
the acceptance of the fifth hypothesis that is, turnover
intentions will have a significantly negative consequence on
organisational effectiveness. As Roberts and Dowling (2002)
and Fombrum (1996) note, the viability and survival of an
enterprise depends on its attractiveness to its numerous
stakeholders, not the least important of whom are its
employees. In this connection, the management should
promulgate processes and policies that project a positive
work atmosphere as this would result in more satisfied and
involved employees (Herrbach, Mignonac, & Gatignon,
2004). In doing so, the company not only takes care of its
existing employees but also achieves the target of
attracting and recruiting talented job applicants. After all,
a company that is perceived to be prestigious conveys
a positive image to its external stakeholders (Cable &
Graham, 2000; Greening & Turban, 2000; McMillan & Deeds,
1998). However, the question that arises here is whether an
externally positive image can be transformed into some-
thing that is equally positive internally. For this, managers
have to work at various levels. At the individual level,
employees have to be assured of person-job fit through
proper responsibilities, realistic job perceptions, and an
open and useful feedback system. At the unit-level, the
company must promote inspirational leadership and posi-
tive group behaviour. Finally, at the organisational level the
culture and the structure of the organisation need to be
aligned so as to form a strong organisational ‘glue’. In this
process, employees’ turnover intentions would be
restrained and this would help the organisation retain its
pool of talented human resources and utilise them to ach-
ieve greater levels of organisational effectiveness.
Limitations of the study
There are certain limitations to this study. First of all, the
cross-sectional design of the research did not allow pure
causal inference. A longitudinal research design would have
been more appropriate. Also, since the data were based on
self-reports, their analysis was limited due to inflation of
the relationships between variables. However, a separate
analysis conducted for common method variance rejected
such apprehensions.
Future scope of research
The present study gave rise to certain issues that may be
addressed by future research. First, the proposed model
should be tested separately in manufacturing and service
sector firms. This is because the immediate work environ-
ment in organisations differs significantly between these
two sectors. Hence the predictive characteristic of
psychological climate may vary across sectors. Second, the
current study took into account two major attitudinal vari-
ables that is, job satisfaction and job involvement. Attitu-
dinal variables have historically shown marked difference
when grouped by gender. Hence separate models based on
gender should check for the mediational capabilities of job
satisfaction and job involvement. Third, future researches
may diagnose the model proposed in this study for cross-
cultural validity so that the consequent implications have
more generalisability. Finally, future studies may also take
into account the construct of organisational citizenship
behaviour which is a non-discretionary component of work.
Acknowledgements
The author gratefully acknowledges the valuable sugges-
tions of the two anonymous reviewers of IMR.
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