IMPACT OF EMPLOYEE ENGAGEMENT ON TURNOVER INTENTIONS WITH THE MEDIATING ROLE OF INTRINSIC AND EXTRINSIC MOTIVATION IN STARTUPS

Abstract

Purpose--This study investigates the relationship between employee engagement (EE), motivation, and turnover intentions (TI) in startups, defined as firms less than 10 years old, with fewer than 50 employees, focusing on scalable innovation in Rawalpindi and Islamabad, Pakistan. It examines whether EE directly reduces TI or if intrinsic motivation (IM) and extrinsic motivation (EM) mediate this relationship in resource-constrained startup environments. Design/Methodology/Approach-- A quantitative design surveyed 284 employees across tech and service startups. Validated scales (Utrecht Work Engagement Scale, Work Preference Inventory) ensured reliability. Structural equation modeling (SEM), factor analysis, correlation, and mediation analysis (PROCESS Model 4 with bootstrapping) tested direct and indirect effects. Findings- The findings indicated no direct relationship between emotional exhaustion and turnover intentions. However, intrinsic motivation strongly mediated this link, while the intrinsic motivation mediated this relationship, whereas extrinsic motivation had a weaker effect. The model indicated a 45% variation in turnover intentions variance, thus proving that intrinsic factors (e.g., autonomy, purpose) are more influential than extrinsic factors (e.g., rewards). Research Practical Implications--Startup leaders should prioritize intrinsic motivators (autonomy, meaningful work) and non-monetary recognition to boost retention, alongside participatory leadership, in resource-scarce settings. Originality/Value--This study enriches organizational behavior literature by applying Self-Determination Theory to Pakistan’s startup ecosystem, highlighting IM’s dominant role in retention. Findings are bounded to urban Pakistani contexts, with limited generalizability to mature firms or non-Asian settings.

Keywords: Employee engagement, intrinsic motivation, extrinsic motivation, turnover intentions, Self-Determination Theory.