What is the potential consequence of instability in employee tenure?

High turnover and recruitment expenses

The correct answer is option 3- High turnover and recruitment expenses.

Instability in employee tenure can lead to employees leaving the organization. The consequence of this high turnover is increased recruitment expenses and costs associated with training new personnel. When there is a lack of stability in employee tenure, it often results in a continuous cycle of hiring and training, which can be both time-consuming and costly for the organization.

Stability of Personnel: “Employee turnover should be minimised to maintain organisational efficiency”, according to Fayol. Personnel should be selected and appointed after due and rigorous procedure. But once selected they should be kept at their post/position for a minimum fixed tenure. They should have stability of tenure. They should be given reasonable time to show results. Any adhocism in this regard will create instability/insecurity among employees. They would tend to leave the organisation. Recruitment, selection and training cost will be high. So stability in tenure of personnel is good for the business.