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This study tests the competing arguments that organization-level turnover is positively associated with organizational inefficiency or, alternatively, positively related to organizational inefficiency only in those organizations experiencing very high or very low turnover. Findings from multivariate analyses support the former argument: in a national sample of 333 hospitals, turnover among registered nurses was found to be associated in a positive linear fashion with both nonpersonnel operating and personnel costs per adjusted inpatient day.