A relationship between employee turnover rates and firm performance could be influenced by diverse mediating and organizational contextual variables. Indeed, research in organizational behavior and human resource management has recognized that understanding this relationship is extremely challenging due to the fact that many variables could influence this relationship. Although a few studies explored the moderating variables such as human resource management practices in this relationship, most studies have paid attention to investigating the direct effect of employee turnover rates on firm performance. In addition, theoretical explanations on this relationship are somewhat limited to addressing such diverse organizational costs related to administration, human capital loss, and social functioning in an organization. In particular, research has not spent much effort to examine the effects of employee turnover on the attitudes and behaviors of employees who stay in an organization, which results in lack of understanding dynamics and complexities in the relationship between employee turnover rates and firm performance. This study investigates the mediation effect of firm-level organizational commitment in the relationship between employee turnover rates and firm performance and how environmental dynamism influences this firm-level organizational commitment and firm performance relationship. This study, at first, addresses how employee turnover rates effect firm-level organizational commitment, building upon social information processing theory. Second, this study investigates the mediating role of firm-level organizational commitment in the relationship between employee turnover rates and firm performance. Third, this study examines the moderation effect of environmental dynamism in the relationship between firm-level organizational commitment and firm performance. The results of this study show that employee turnover rates negatively effect firm-level organizational commitment which results in decreased firm performance and that environmental dynamism moderates the relationship between firm-level organizational commitment and firm performance. Overall, these results support the moderated-mediation effect in the relationship between employee turnover rates and firm performance. This study not only contributes to accumulating knowledge on the dynamic and complex relationship between employee turnover rates and firm performance but also provides practical and strategic implications for firms that strive to create and retain competitive advantage by effectively managing employee turnover and retention.