Discharges, Poor-Performer Quits, and Layoffs as Valued Exits: Is It Really Addition by Subtraction?

Abstract

We contend that a variety of types of employee exits from the firm are presumed to be a net positive and are thus valued by management, resulting in a potentially important new way to think about these leavers. For each of three valued exit (VE) types (discharges, poor-performer quits, and layoffs) we examine incidence, construct similarities and differences, and antecedents. We also summarize and critique the literature on VE consequences for the organization. In doing so we discuss how an underlying tension must accompany the analysis of VEs. Specifically, the intuitive notion of addition by subtraction must be considered relative to important contextual considerations and to evidence that the operational disruption created by VE departures may at times mitigate or even outweigh the VE benefits. Underlying our analysis is the stipulation that the formal consideration of VEs is in its infancy and is thus laden with conceptual and methodological challenges that scholars must address if we are to benefit from this new approach to employee exits from the firm.