Abstract ▼ AI-Helper

Despite interest in the relationship between performance-based pay and employee turnover, previous studies have not provided consistent results. Therefore, in this study, based on the tournament theory and the fairness theory, the effect of the performance-based pay ratio on the employee turnover ra...

Despite interest in the relationship between performance-based pay and employee turnover, previous studies have not provided consistent results. Therefore, in this study, based on the tournament theory and the fairness theory, the effect of the performance-based pay ratio on the employee turnover rate was established as an alternative hypothesis and examined. In addition, it was investigated whether the level of welfare benefits had a moderating effect on the relationship between the performance-based pay ratio and the turnover rate.
This study used data from the 7th (2017) questionnaire survey conducted by the Korea Research Institute for Vocational Education & Training in order to verify the hypothesis, and a total of 305 companies were used in the final analysis. As a result of the analysis, like the prediction based on the tournament theory among the two theories, the performance pay ratio showed a negative relationship with the employee turnover rate. Also, it was found that the level of welfare benefits had no moderating effect on the relationship between the performance-based pay ratio and the employee turnover rate. Finally, based on these research results, this study discussed theoretical and practical implications, and presented its limitations and future research direction.

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