Social exchange theory is used as a basis for examining the process by which employees are dismissed from organizations. Interview data from an exploratory study of retail outlet managers suggest that managers are influenced by information from group members as they calculate a cost-benefit ratio for the employer-employee relationship. This calculation takes into account past, present, and future exchanges, as well as the comparison level for alternatives. Results indicate a progression of communication events that lead to a termination meeting, followed by postdismissal communication to other employees. Results also indicate a type of encouraged or induced turnover that fails to fit the typical voluntary-involuntary dichotomy of employee exit studies. A model for employee dismissals is proposed based on these results.
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