Abstract
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-forperformance
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.