The Impact of Interpersonal Support, Supervisory Support, and Employee Engagement on Employee Turnover Intentions: Differences Between Financially Distressed and Highly Financially Distressed Hospitals

Background Critical access hospitals (CAHs) are small hospitals in rural communities in the United States. Because of changes in rural population demographics, legacy financial obligations, and/or structural issues in the U.S. health care system, many of these institutions are financially distressed. Indeed, many have closed due to their inability to maintain financial viability, resulting in a health care and economic crisis for their communities. Employee recruitment, retention, and turnover are critical to the performance of these hospitals. There is limited empirical study of the factors that influence turnover in such institutions. Purpose The primary purpose of the study was to study relationships between interpersonal support, supervisory support, employee engagement, and employee turnover intentions in CAHs. A secondary purpose was to study how financial distress affects these relationships. Methodology Based on a survey of CAH employees (n = 218), the article utilizes mediated moderation analysis of a structural equation model. Results Interpersonal support and supervisory support are positively associated with employee engagement, whereas employee engagement mediates the relationships between both interpersonal support and supervisory support and employee turnover intentions. Statistically significant differences are found between these relationships in financially distressed and highly financially distressed institutions. Conclusions Our results are consistent with the social exchange theory upon which our hypotheses and model are built and demonstrate the value of using the degree of organizational financial distress as a contextual variable when studying motivational factors influencing employee turnover intentions. Practical Implications In addition to advancing management theory as applied in the CAH context, our study presents the practical insight that employee perceptions of their employer’s financial condition should be considered when organizations develop employee retention strategies. Specifically, employee engagement strategies appear to be of greater value in the case of highly financially distressed organizations, whereas supervisory support seems more effective in financially distressed organizations