Abstract:
Purpose: The purpose of this research is to examine the impact of organizational
rewards both financial and non-financial on employee turnover intention within small
and medium-sized enterprises (SMEs) in Sri Lanka. By exploring the relationship
between these rewards and turnover intentions, the study aims to provide valuable
insights that can help SME owners and managers develop more effective retention
strategies, thereby enhancing the overall sustainability and competitiveness of SMEs
in Sri Lanka.
Design/methodology/approach: Data were collected through structured
questionnaires from a random sample of 280 employees working in selected small
and medium enterprises within the Ampara Divisional Secretariats. The data were
analyzed using Descriptive statistics, Pearson correlation analysis, and Regression
with the support of SPSS version 26.0. The normality test, ANOVA analysis, and
factor analysis were carried out.
Findings: This study used financial rewards (salary, employee bonuses, and fringe
benefits) and non-financial rewards (supervisor support, recognition, working
environment, training, and promotion) as independent variables, with employee
turnover as the dependent variable. In this study, Cronbach’s Alpha was 0.837
indicating good reliability and validity for the research variables. The study found
that both financial and non-financial rewards displayed a strong negative correlation
with turnover intention. Specifically, as financial rewards increased, employee
turnover intention decreased.Practical implications: This study highlights the importance for owners and
managers to understand the reasons behind employees' turnover intentions. It
emphasizes the need to focus on activities that can help maintain a high retention rate
within SMEs by ensuring employees are satisfied and motivated in the workplace.
Specifically, it focuses on how both financial and non-financial rewards can influence
retention rates in SMEs in Sri Lanka. By exploring these dynamics, the study offers
practical recommendations for improving employee satisfaction and motivation,
which in turn can enhance retention and overall business performance.
Originality value: Retaining talented and high-quality employees is considered one
of the key long-term sustainable competitive advantages for SMEs. However, it has
become a significant challenge for companies in the modern business environment.
Therefore, this study provides new insights into the rewards-turnover relationship in
SMEs in Sri Lanka, offering valuable guidance for business owners seeking to
enhance employee retention.
