Organizational Tenure and Employee Performance: A Multilevel Analysis

Previous research has investigated the relationship between organizational tenure and performance by focusing primarily on organizational tenure of the individual employee. We propose that this approach is limited because organizational tenure should be conceptualized as relating to multiple entities including teams and their leaders. As predicted, analysis of two objective performance indicators of 1,753 employees working with 250 leaders of natural work teams in a financial services company revealed that, beyond employee organizational tenure, team leader organizational tenure and team organizational tenure diversity had positive incremental effects on employee performance. Moreover, the positive impact of employee organizational tenure was less pronounced in teams with high rather than low tenure diversity. Our findings suggest that organizations’ capacity to promote performance will be limited if they focus on organizational tenure of an individual, while neglecting the ways in which performance is shaped by organizational tenure related to multiple entities within a team.

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