How Paying Employees to Quit Can Improve Retention

Motivation is a critical factor in employee retention, and nothing highlights this more than a Pay-to-Quit strategy. This involves offering employees money to voluntarily resign, creating an incentive for them to reveal their true levels of motivation, and can help managers to identify genuinely motivated employees. Companies like Zappos and Amazon have implemented variations of the Pay-to-Quit program, and evidence suggests there are benefits for all parties involved. Managers can identify top performers, dissatisfied employees can leave amicably with financial compensation, and motivated employees can demonstrate their commitment. Employees who decline the offer feel a need to justify their decision by working harder and investing in their future with the company, leading to increased productivity and commitment. There are five requirements for launching a Pay-to-Quit program: