https://doi.org/10.1177/0170840617693269 Organization Studies 1–22 © The Author(s) 2017 Reprints and permissions: sagepub.co.uk/journalsPermissions.nav DOI: 10.1177/0170840617693269 www.egosnet.org/os Tether or Stepping Stone? The Relationship between Perceived External Reputation and Collective Voluntary Turnover Rates Erin E. Makarius The University of Akron, USA Charles E. Stevens Lehigh University, USA Aino Tenhiälä IE Business School – IE University, Spain Abstract Signaling theory suggests that resources such as firm reputation can send multiple signals that create dual pressures on stakeholders. These tensions are apparent when examining the relationship between a firm’s reputation and the collective voluntary turnover rates it experiences. On the one hand, a favorable reputation may tether employees to the firm due to the perceived desirability of working for a reputable company, resulting in lower voluntary turnover rates. On the other hand, a favorable reputation may make employees believe they are more marketable and thus may serve as a stepping stone relating to higher voluntary turnover rates. The purpose of this study is to investigate whether and when reputation acts as a signal of desirability or a signal of ease of movement in predicting collective voluntary turnover rates. We find some evidence for an overall tethering effect for more reputable firms. In addition, our findings demonstrate that reputation is more likely to result in stepping stone effects in certain signaling environments including when firms are in more munificent industries, are younger, and have higher pay levels. Tethering effects are observed when firms are in less munificent industries, are older, and have lower pay levels. Keywords collective voluntary turnover, reputation, signaling theory, turnover Corresponding author: Erin E. Makarius, Ph.D., Department of Management, College of Business Administration, University of Akron, 364, 259 South Broadway, Akron, OH 44325, USA. Email: makarius@uakron.edu 693269OSS 0 0 10.1177/0170840617693269Organization StudiesMakarius et al. research-article 2017 Article