At first, the offer sounds upside down: take cash and leave your job. But in experiments led by researchers at the University of Waterloo, employees who turned down that offer worked harder afterward.
Pay-to-quit programs give workers a bonus if they choose to resign. Some companies, including Zappos and Trainual, have used versions of the idea. Researchers from the University of Waterloo, Wilfrid Laurier University and McMaster University wanted to find out whether the approach could help employers identify workers who no longer felt connected to their organization — and what it might do to those who stayed.
The team ran two experiments. In the first, more than 300 undergraduate students worked in a controlled lab setting for either their own university or a rival institution. In the second, actual employees recruited through an online labor market platform responded to a scenario in which their company introduced a pay-to-quit offer. Across both studies, the results pointed to two effects: the offer helped sort employees by how connected they felt to their organization, and people who chose to stay showed stronger work effort afterward.
That second finding surprised the researchers. They had expected that staying workers might resent colleagues who were paid to leave. Instead, employees who rejected the cash increased their effort in the period that followed. Dr. Kelsey Matthews, a professor at the University of Waterloo's School of Accounting and Finance, said choosing the organization over the money could sharpen employees' sense of belonging and motivation. The researchers suggest that making an active choice to stay brings a person's reasons for valuing their job to mind.
The offer also affected workers differently. Those with little connection to their organization, its values or its goals were most likely to accept the money and leave. Workers who felt strongly connected were unlikely to go, whatever the offer. The biggest effect was among employees in the middle: those with a moderate level of connection were significantly more likely to resign when a bonus was available. The researchers say this group makes up at least 35% of a typical workforce.
For employers, the approach could help address a familiar challenge: workers who have mentally checked out but have not resigned. A voluntary offer may encourage some of them to leave, while the employees who turn it down may feel more committed. That combination could help organizations better understand who wants to stay and renew energy among those who do.
But the findings do not make the choice simple. Employers could lose moderately connected workers who might have built stronger ties over time. Whether an employee accepts may also depend on personal finances and whether similar jobs are available elsewhere — factors the experiments did not test. The study, titled “Paying Employees to Quit: An Experimental Study of Sorting and Motivational Effects,” grew from Matthews' doctoral work at Laurier and was published in the Journal of Management Accounting Research. After eight years of work, it offers evidence that an unusual bonus can shape both who leaves and how some stayers work.