While money is not the cure-all, it can contribute to a reduction in turnover. A research study (Guthrie 2000) found:

1. As the use of skill- or knowledge-based pay systems is increased, turnover is decreased.
2. Extensive use of group-based incentive plans increases turnover rates. However, the negative effect of the group-based pay might be lessened if we distribute the group pay according to individual performance.
3. As the size of the group involved in group-incentive pay plans increases, so does turnover.

Guthrie, James P., (2000) Alternative pay practices and employee turnover: An organization economics perspective, Group & Organization Management, Vol. 25, Iss.4; page 419, 21 pages