By Rachel Doherty
Choosing to stay over a cash bonus makes employees more committed and hardworking.
New research co-authored by Dr. Kelsey Matthews, a professor at the School of Accounting and Finance, looks at pay-to-quit programs, which offer cash to employees who choose to resign. Matthews and her co-authors at Wilfrid Laurier University and McMaster University found the programs work as intended, and they uncovered a benefit nobody expected: employees who turned the offer down worked harder afterward.
“It is such a counterintuitive practice,” says Matthews. “Most of what we hear about incentives is how to get people to stay, work harder or perform better, so the idea of offering money for someone to leave immediately raised a really interesting question: under what circumstances could that genuinely be a smart organizational strategy?”
The research grew out of her doctoral work at Laurier and took eight years to develop. It is published in the Journal of Management Accounting Research.