In: Finance
Define organizational commitment, and explain why it is important. Discuss why employers work to reduce rates of turnover.
In plain and simple words organizational commitment is an individual’s psychological attachment to the organization for which he/she works. Organizational commitment is important because it plays an important and significant role in determining whether an employee will stay with the organization for a long period of time or for a short period of time. It also determines the level of commitment and passion that an individual will have for the work being done by him/her.
Employers work to reduce rates of turnover because of the fact that a high turnover rate can have negative and costly consequences for a company. A high turnover will lead to increased costs as the employer will have to spend extra money towards recruiting, hiring and training of new employees. Secondly a high turnover rate will have a negative impact on morale of the employees and this will also reduce workplace productivity in future. It is for these reasons that employers work to reduce rates of turnover.