Beyond compensation: effect of employee benefits on job motivation, performance, and turnover intention

Abstract

This study investigates the influence of employee benefits on motivation, performance, and turnover intention within contemporary workplaces that increasingly emphasize employee well-being. Addressing a key gap in the literature, it employs Structural Equation Modeling (SEM) and analyzes data from 387 Generation Y and Generation Z employees in Small and Medium Enterprises (SMEs) in Thailand. The analysis examines how diverse benefit types influence employees’ motivation, performance, and decisions to remain with their organizations. The findings reveal a direct and positive link between employee benefits, enhanced motivation, and improved performance, which together significantly reduce turnover intention. Specifically, attraction and retention strategies, organizational support mechanisms, and a growth-oriented, well-being-focused environment emerged as critical factors in motivating employees and elevating their performance. Overall, the study demonstrates that strategically designed employee benefit packages—aligned with employee needs and workplace realities—foster engagement, productivity, and loyalty. This study contributes valuable insights for organizational leaders seeking to refine benefit systems and extends the academic understanding of the strategic importance of non-monetary benefits in promoting employee satisfaction and retention.