The relationship between pay-for-performance and turnover intention
Year: 2025
Type: article
Abstract: Orientation: The current business environment is highly competitive, and organisations use reward strategy as a strategic tool to motivate employees to remain in the organisation and exceed set performance standards. Therefore, keeping them would require sound reward strategies, which may come as competitive pay-for-performance. Research purpose: Informed by the expectancy theory, the study sought to critically investigate the relationship between pay-for-performance and turnover intention. Motivation for the study: While the need for a sound compensation system cannot be over-emphasised, the debate on the relationship between pay-for-performance and turnover intention remains inconclusive. Hence, spurring the attention of researchers. Research approach/design and method: Using a quantitative research approach, data were collected from 176 participants utilising a closed-ended questionnaire. A convenience sampling technique nested in a non-probability method was employed to select participants from the largest bank in Lesotho. Main findings: The regression analysis results indicated that pay-for-performance has a significant relationship with turnover intention. The findings indicated that pay-for-performance helps in minimising turnover intention. Practical/managerial implications: Management should strengthen the reward strategy for long-term pay-for-performance. The management should allow employees to participate in the development of pay-for-performance, so that, from the outset, they understand the difference between outstanding and acceptable performance. Contribution/value-add: The study contributes to the scarce empirical evidence on the interplay between pay-for-performance and turnover intention, filling a gap in the existing literature by focusing exclusively on the unique dynamics in the banking sector.
Authors: Pitso Mohapi, Thokozani I. Nzimakwe, Reward Utete
Institutions: University of KwaZulu-Natal, University of Johannesburg
Language: English
Subfield: Human Factors and Ergonomics
Field: Social Sciences
Domain: Social Sciences
Open Access status: gold
Estimated APC paid: $699
OpenAlex ID: W7092298910