INTERNATIONAL JOURNAL OF SCIENTIFIC & TECHNOLOGY RESEARCH VOLUME 6, ISSUE 09, SEPTEMBER 2017 ISSN 2277-8616 67 IJSTR©2017 www.ijstr.org The Impact Of Reward System On Employee Turnover Intention: A Study On Logistics Industry Of Sri Lanka M.V.S. Mendis Abstract: Human capital is a paramount important part of todays’ business world. For any company to achieve its corporate strategies, i t is important to have motivated, committed workforce within the company. Therefore keep employees satisfy is a necessity for any organization. Otherwise they may leave the company as there are lots of job opportunities remain in this modern business world. This study focus on how reward system of an organization impact on employee turnover intention. This study empirically evaluated five independent variables (remuneration, cash incentives, work life balance, supervisor support and employee recognition) and their relationship to the turnover intention of non-executives in the logistics industry of Sri Lanka. The sample consists of 97 non-executive staff in the logistics industry of Sri Lanka. The data collection was done by using a self-administrated structured questionnaire. The results indicated that remuneration, cash incentives, work life balance, supervisor support and employee recognition variables were negatively and significantly correlated with turnover intention. And those relationships were strong. Results of regressing the reward system on turnover intention showed that reward system is a powerful predictor of labour turnover in logistics industry of Sri Lanka. The research findings give evidence that better financial and non-financial rewards have strong impact on employee turnover intention. Therefore to reduce employee’s high intention to leave the company, the management needs to develop well balanced reward system in both financial and non-financial aspects. Index Term: Logistics Industry, Reward system, Sri Lanka, Turnover intention. ——————————  —————————— 1 INTRODUCTION In today’s changing environment and organizations, buffered by globalization, social variation and intense competitive environment, the sources of sustained competitive advantage have lifted from finance concept to technology side and now to human assets. To be able to achieve the organizations goals, management need to understand how to motivate their employees. In order to do it management need to understand their attitude to work and life and understand different personality types. Inability of accomplishment of above mission, may lead to leaving employees from the work place resulting huge financial and non-financial loses in the organization. Employee turnover is the most challenging issue of modern organizational environment. Most of the time employee turnover; movement of employee from one firm to another within particular time period, may result deterioration of quality of the organization. In Sri Lankan context, this issue is more critical in operation level employees of many industries. Rajapaksha (2015) stated that employee turnover significantly affects to the role of an organization in apparel industries. Nowadays organizations are looking for better ways to help their employees to be more productive and to be happier in their work place with the aim of keeping high retention rate. Employees want to be appreciated of their efforts and they expect a fair return on that effort as well. Most organizations implement many strategies which makes employees happier. A systematic way of a scheme or a program which gives incentives for those individuals or groups who perform well in the firm called a Reward system. Reward system can be categorized into two areas (Armstrong, 2007). Those are financial rewards and non - financial rewards. Financial rewards mean those which satisfy the employees by providing rewards in terms of money. Besides the financial rewards, there are certain non - financial rewards which can satisfy the ego and self-actualization needs and wants of employees. Lack of fair rewards and recognition system may cause to create unsatisfactory workforce within the organization, because today’s employees want to be treated like a valuable resource not a disposable asset. Therefore, in the current context retention of the qualified blood within organizations has become one of the most common challenges and thereby one of the major problems managers of organizations face today is employee turnover. Intention to turnover refers to an individual’s perceived probability of staying or leaving an employing organization (Cotton and Tuttle, 1986). The objective of this paper is to explore the relationship between reward system and turnover intention of non-executives in logistics industry of Sri Lanka. Logistics industry in Sri Lanka thrives towards a great extent. In terms of quality and competency, logistics service in Sri Lanka has increased the logistics performance index from 2.10 - 2.70 since 2010 - 2014 (Index Mundi, 2014). 10% of contribution coming towards Sri Lankan economy by logistics sector and 12%-14% of employment opportunities also covered through logistics sector as well (Jayalal, 2015). Employee turnover intention is an important concept that every manager wants to eliminate within their organizations. However the available studies do not provide empirical evidence with regard to the relationship between reward system and turnover intention of non-executive employees in logistics industry of Sri Lanka. So this study will focus on whether there is a relationship between reward system and non-executive employees’ turnover intention in the logistics industry of Sri Lanka. 2 LITERATURE REVIEW 2.1 Turnover Intention Hom and Griffeth (1995) define turnover intention as the relative strength of an individual’s intent toward voluntary permanent withdrawal from an organization. Cotton and Tuttle (1986) define turnover intention as an individual’s perceived probability of staying or leaving an employing organization. ————————————————  M. V. S. Mendis, Assistant Lecturer, Department of Human Resource Management, Faculty of Commerce and Management Studies, University of Kelaniya, virangisonali2@gmail.com