Merit‐Based Rewards, Job Satisfaction and Voluntary Turnover: Moderating Effects of Employee Demographic Characteristics

14 Pages Posted: 5 May 2020

See all articles by Fabian Jintae Froese

Fabian Jintae Froese

Independent

Vesa Peltokorpi

University of Wollongong

Arup Varma

Loyola University of Chicago

Azusa Hitotsuyanagi‐Hansel

affiliation not provided to SSRN

Date Written: July 2019

Abstract

This paper draws on the reflection theory of compensation (Thierry, H. (1998). ‘Compensating work’. in P. J. D. Drenth, H. Thierry and C. J. de Wolff (eds), Handbook of Work and Organizational Psychology, 2nd edn, pp. 291–315, Psychology Press: Hove; Thierry, H. F. (2001). ‘Job evaluation systems and pay grade structures: do they match’, International Journal of Human Resource Management, 8, pp. 1313–1324) to examine the influence of individual merit‐based rewards on voluntary turnover via job satisfaction. It also tests the moderating effects of employees’ gender, age and education level between merit‐based rewards and job satisfaction. Data were collected from 636 employees in Japan at three points in time over a 12‐month period. The findings show that merit‐based rewards have a direct, positive effect on job satisfaction and an indirect effect on voluntary turnover. The effect of merit‐based rewards on job satisfaction was moderated by gender and education, providing evidence that merit‐based rewards are more important for male and highly educated employees. Practical and theoretical implications are discussed.

Suggested Citation

Froese, Fabian Jintae and Peltokorpi, Vesa and Varma, Arup and Hitotsuyanagi‐Hansel, Azusa, Merit‐Based Rewards, Job Satisfaction and Voluntary Turnover: Moderating Effects of Employee Demographic Characteristics (July 2019). British Journal of Management, Vol. 30, Issue 3, pp. 610-623, 2019, Available at SSRN: https://ssrn.com/abstract=3590604 or http://dx.doi.org/10.1111/1467-8551.12283

Vesa Peltokorpi

University of Wollongong

Northfields Avenue
Wollongong, 2522
Australia

Arup Varma

Loyola University of Chicago

25 East Pearson Street
Chicago, IL 60611
United States

Azusa Hitotsuyanagi‐Hansel

affiliation not provided to SSRN

No Address Available

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