Impact of Performance Rewards on Employee Turnover in Sri Lankan IT Industry

Abstract

Almost all IT organizations carryout performance reward schemes to evaluate and compensate employees based on their performance. However not all reward schemes are effective in retaining employees, thus this study attempt to reveal the most effective reward types that can help IT organizations to minimize Employee Turnover. This study uses quantitative method through an online survey. The population for this study is software professionals working in Sri Lankan software organizations, estimated to be around 34,000 [1]. Data analysis was carried out using Pearson correlation and Linear Regression. In the present study Monetary Rewards, Non-Monetary Rewards and Reward Frequency were negatively correlated with Employee Turnover. This means that as the Monetary Rewards and Non-Monetary Rewards are less, and the rewards are offered at lesser frequency, employees tend to turnover more in IT organizations. Detailed analysis revealed that long term monetary rewards are more successful in retaining employees which are offered at semi-annual intervals. This research brings out valuable results that can be incorporated in organizational performance reward policy by the top managements making a special emphasis on the turnover of their employees. The research findings hint on other avenues in performance rewards at workplace and its impact on the individuals that could be explored as future research.