Organizations with low turnover and satisfied employees tend to perform better. On the other side of the coin, organizations have to act when an employee’s performance consistently falls short. Sometimes terminating a poor performer is the only way to show fairness, ensure quality, and maintain customer satisfaction.

Organizations must try to keep good performers and encourage employees whose performance is chronically to leave. When the organization initiates the turnover (often with employees who would prefer to stay), the result is involuntary turnover. Examples include terminating an employee for drug use or laying off employees during a downturn. When the employees initiate the turnover (often when the organization would prefer to keep them), it is voluntary turnover. Employees may leave to retire or to take a job with a different organization.

Typically, the employees who leave voluntarily are either the organization’s worst performers, who quit before they are fired, or its best performers, who can most easily find attractive new opportunities. In general, organizations try to avoid the need for involuntary turnover and to minimize voluntary turnover, especially among top performers. Both kinds of turnover are costly. Replacing workers is expensive. When employers can find people to hire, new employees need time to learn their jobs and build teamwork skills.

For a number of reasons, discharging employees can be very difficult. The decision has legal aspects that can affect the organization. Along with the financial risks of dismissing an employee, there are issues of personal safety. Distressing as it is that some former employees go to the courts, far worse are the employees who react to a termination decision with violence. Effective human resource management can help the organization achieve its goals for both kinds of turnover.