Looking to keep your best employees? Pay them what they're worth.

A team of Cornell University researchers found that high salary growth proved critical in retaining high-performing employees. Promotions, on the other hand, had no effect on the turnover of similarly paid high performers and did little to reduce their desire to accept other employment offers.

Promotions, however, were found to increase the likelihood of turnover among similarly paid low-performing individuals, because promotions provided them with visibility and legitimacy in the external job market.

The study, conducted by Cornell professors John Boudreau, Barry Gerhart (now at Vanderbilt University) and doctoral student Charlie Trevor of the Center for Advanced Human Resource Studies of Cornell's School of Industrial and Labor Relations, examined records of more than 5,100 petroleum company employees who were hired between 1983 and 1988 and were still employed or had voluntarily left the company as of Jan. 1, 1990. Records contained information on performance, pay levels and promotions.

High salary growth, which is a major factor in retaining all performers, was shown in the study to be most useful in retaining high performers. Researchers say because high performers can more easily find alternative employment when compared to their lesser-performing colleagues, their turnover is more highly dependent on how satisfied they are with their job, and job satisfaction in large part depends on salary growth.

"The fate of these few employees [high performers] is disproportionately important to the organization," the authors said. "Top performers are of value not only for their present and short-term future performance value alone, but also for the selection pool from which future firm leaders will be chosen.

"Tomorrow's stars and perhaps even franchise players may be among today's few top performers. Their retention, at least in part, appears to depend on paying them according to their performance," the study concluded.

The study, "Voluntary Turnover and Job Performance," is published in the Journal of Applied Psychology Vol. 82, No. 1, 1997.