Revisiting the Relationship Between Performance and Turnover: Are High Performers More Likely to Leave?

Research has proposed that there is a negative association between employee performance and turnover likelihood; that is, high performers on average show lower turnover rates than average and low performers. This study, however, revisits this common assumption by proposing a more nuanced view. We propose that while high performers do show lower overall turnover as suggested by prior studies, this is mainly due to their reduced downward mobility and industry exits. That is, we argue that when focusing specifically on turnover to higher-performing rivals, high performers are more likely to leave. This distinction is crucial as losing talent to stronger rivals can be particularly harmful, especially for firms aiming for market leadership. Our empirical study was conducted by analyzing the career data of all analysts working in Korean securities firms from 2009 to 2018 and provided support for our hypotheses. The present study emphasizes the need for a finer-grained analysis of turnover, highlighting that firms can face a higher level of high performers' turnover than previously theorized, if certain strategic risks are considered: impediments to a firm's growth in a competitive market due to losing human capital.