Multiple Reputation Effects on Employee Turnover Intention under Uncertainty: A Signaling Theory Explanation

This paper concentrates on a period characterized by uncertainty and explores how diverse organizational reputations for different behaviors, under such circumstances, display varying levels of signal effectiveness, resulting in diverse effects on employees’ behaviors. Drawing upon signaling theory, we examined independent and interaction effects of two organizational reputation signals―business group affiliation rating and ESG (environmental, social, and governance) rating―on employees’ turnover intention. We further examined the moderation effect of employees’ perception of organizational resilience on the business group affiliation and ESG effect, respectively. Employing a multilevel and multisource approach, we gathered survey data from 980 employees within 51 Korean organizations during the pandemic. We subsequently aligned this information with organizational reputation signals sourced from secondary sources. We employed a multilevel hierarchical modeling to test our hypotheses, and found a significant effect of the structural reputation signal, business group affiliation rating, on employees’ turnover intention. However, the effect of the behavioral signal, the ESG rating, was not found to be significant. We further found a significant interaction effect of the two reputation signals. In addition, the moderation effect of employees’ perception of organizational resilience was significant only for the ESG rating. Theoretical and practical insights are discussed.