Reward Contingency, Unemployment, and Functional Turnover

Abstract

Based on the valence model of expectancy theory and the Cornell model of job satisfaction, this field study investigated the relationship between reward contingency, unemployment, pay satisfaction, job satisfaction, and functional turnover. The latter of which separates turnover into four categories: poor performing leavers, good performing leavers, poor performing stayers, and good performing stayers. It was conducted with a geographically dispersed sample of sales representatives (i.e., from 25 states and 66 cities), resulting in unemployment rates that ranged from 2 percent to 12 percent. The sales representatives were employed by four companies that paid different combinations of salary and commissions, ranging from mostly salary and little commission to 100 percent commission. A discriminant analysis accounted for 62 percent of the variance in functional turnover and achieved an overall classification hit rate of 67 percent across the four functional turnover groups. Follow-up univariate analyses indicated that objective reward contingency ( R 2=.34), state unemployment ( R 2=.11), state sales unemployment ( R 2=.08), education ( R 2=.09), and tenure ( R 2=.08) accounted for most of the variance in functional turnover. Perceived reward contingency, pay satisfaction, job satisfaction, age, and gender were not related to functional turnover.