Total rewards to enhance employees’ intention to stay: does perception of justice play any role?

Abstract

Purpose

The purpose of this paper is to explore how total rewards might influence intention to stay among employees of private sector banks in India. A moderated-mediation mechanism is hypothesized, in which a system of total rewards leads to intention to stay via engagement and organizational justice (OJ) moderates the linkage of total rewards with engagement.

Design/methodology/approach

Perception of employees about the constructs considered has been assessed by a survey, using a structured questionnaire. Employees of private banks located in the State of Uttar Pradesh were the population for this study. A total of 17 branches of 7 private banks were covered, and the number of valid responses was 761. Hypotheses testing has been done with SPSS PROCESS command.

Findings

Hypotheses proposing mediation (engagement as mediator between total rewards and intention to stay), moderation (OJ as moderator between total rewards and engagement) and moderated mediation have found support.

Practical implications

Results obtained direct us to infer that in addition to the amount or value of any reward, aspects of OJ, such as equity and fairness in allocation of such reward and transparency in the procedure followed, are likely to influence the effectiveness of total rewards practices in engaging employees and motivating them to stay with their present employer.

Originality/value

This study adds to total rewards literature by highlighting how a total rewards system can lead to engagement, and consequently to employees’ intention to stay. Results establish OJ as an important attribute to any total rewards package to make the latter more valuable and effective.

Citation

Rai, A., Ghosh, P. and Dutta, T. (2019), "Total rewards to enhance employees’ intention to stay: does perception of justice play any role?", Evidence-based HRM, Vol. 7 No. 3, pp. 262-280. https://doi.org/10.1108/EBHRM-07-2018-0045