Working without a net: time, performance, and turnover under maximally contingent rewards

Article Abstract:

Researchers examined the performance-turnover relationship under conditions of varying reward contingency with 189 sales representatives who earned base pay plus commission (moderately contingent rewards) during their first 2 months of work and commission-only pay (maximally contingent rewards) thereafter. As predicted by an expanded version of the contingent rewards hypothesis, the performance-turnover relationship was stronger under maximally contingent rewards, higher than any reported in the literature. Using event history analyses, the researchers also showed that current (time-dependent) performance affords a better prediction of turnover than average (time-stationary) performance. Performance validity (slope over time) had a further, unique effect on turnover risk. The implications of these findings for future studies of the employee turnover process and pay systems were discussed. (Reprinted by permission of the publisher.)

Compensation and benefits, Employee incentives, Sales personnel, Salespeople, Commissions (Compensation), Commissions (Fees)

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Correcting point-biserial turnover correlations for comparative analysis

Article Abstract:

Several methods have been proposed for correcting point-biserial turnover correlations for variations across studies in turnover base rates, which artifactually constrain the size of such correlations. Williams (1990) critically evaluated these proposed methods and also questioned the appropriateness of such corrections when turnover base rates are "related to nonartifactual differences in conditions across studies" (p. 735). We point out additional problems with the proposed methods for correcting point-biserial correlations and with Williams' critique, and we suggest an alternative method for dealing with these problems. (Reprinted by permission of the publisher.)

Methods, Correlation (Statistics), Williams, C.R.

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