The role of compensation in shaping employee's behaviour: a mediation study through job satisfaction during the Covid-19 pandemic.
| Autor | Aman-Ullah, Attia |
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Introduction
High turnover is a challenging issue faced by the healthcare organizations throughout the world (Aman-Ullah, Aziz, & Ibrahim, 2020). However, its impact is seen high in developing countries like Pakistan. Pakistan has the 7th largest population in the world, with a birth rate of 2.83% and an additional burden of 1.4 million Afghan refugees; thus, the current rate of turnover does not bode well for the country. According to the Ministry of Labour of Pakistan, turnover is very high in healthcare organizations. Moreover, turnover causes financial loss, as Pakistan spends huge money on doctors' education and training; when they leave the country, all the spent money goes to waste. In the previous literature, the doctors' turnover is less highlighted by scholars. Therefore, turnover is an important concern of this study (see Figure 1).
Employee retention is the employee's willingness to work with the same organization for a prolonged tenure (Aman-Ullah et al., 2020). Past literature indicated that doctors' retention in Pakistan is not satisfactory (Mir, Shaikh, Rashida, & Mankani, 2015). In Pakistan, situation doctors are not satisfied with the working conditions and hence they prefer to work in private sectors or in foreign countries. As a result, retention of doctors in Pakistan is very low (Ghulam et al., 2019). Therefore, it is imperative to resolve the most prominent issue of low retention among doctors in Pakistan. Past literature revealed that compensation is a significant motivator, showing noticeable influence on employee's behaviour (Milkovich, Newman, & Milkovich, 2002). However, its influence varies from person to person under different circumstances. Therefore, this study is an attempt to test the influence of compensation on employee retention and turnover intention among Pakistani doctors.
Compensation is a sum of rewards either in the form of money or benefits (Milkovich et al., 2002). In view of Arnold (2005), compensation is the strongest basic motivation among all the factors affecting employee's behaviour. Pakistani doctors are the victims of compensation-related problems (monetary and non-monetary), for instance, inadequate amount of salary packages, delayed salaries, and in some cases, young doctors are forced to work without a salary (Haniya, 2021). During the pandemic, when the rest of the world compensated their doctors with risk allowances, provided separate residences and honoured them like warriors, Pakistan has delayed or even deducted the doctors' salaries, which further provoked the situation (Waqar, 2020). Several young doctors, especially new entrants, were forced to do unpaid work. However, for many, it is difficult to afford transportation expense since hospitals are not providing transportation facility. Consequently, this became harmful especially during emergency situations since young doctors are the most active group dealing with Covid-19 patients. Furthermore, Pakistan's health budget is low compared to other expenditures. Therefore, doctors often resist policies and show concerns over low salaries. Previously, Tahir, Kauser, & Tahir (2011) reported that doctors were rapidly migrating to other countries offering them better compensation. Therefore, it is argued that lack of compensation is likely a demotivating factor for the healthcare employees in Pakistan.
The majority of young doctors belong to the middle-class families, who have spent a lot of time and money on their children during their education, and they no longer allow their children to work without proper salaries (Waqar, 2020). As a result, these people are moving to other countries where they get better remunerations. Past literature also showed that a high number of Pakistani doctors move to other countries, where they are afforded better salary packages (Ghulam et al, 2019). Similarly, Chew and Chan (2008) added that in order to get desired results, compensation must be competitive with the agreement as well as with the salaries of similar-level jobs. This view has been further supported by Bibi, Pangil, Johari and Ahmad (2017) who assert that low compensation is a problem in the service sector, creating difficulties in employee retention.
In the present study, job satisfaction is introduced as a mediator to bring compensation in equilibrium with turnover intention and employee retention. According to Rahman and Syahrizal (2019), job satisfaction is a measure of an employee's sentiments and attitudes regarding their work environment, job type, relationships with co-workers, social networking and remuneration. Satisfaction comes after fulfilment of several work-related desires and needs of employees. However, needs and desires vary among different individuals. In view of Eyupoglu, Jabbarova and Saner (2017), job satisfaction is a positive emotional state that comes out from one's work experience. The same work that is positive for one person might be negative for others. Bayarcelik and Afacan Findikli (2016) agreed with this and remarked that job satisfaction represents both positive and negative outcomes from the emotional evaluation of employees, which shows to what extent an employee is satisfied or dissatisfied. According to Mudor (2011), a strong relationship exists between compensation and job satisfaction. Rahman and Syahrizal (2019) found a significant association between job satisfaction and turnover intentions. Meanwhile, Terera and Ngirande (2014) found a significant association between job satisfaction and employee retention.
The present study particularly focused on the impact of compensation on employee retention, turnover intentions and job satisfaction to expand the theory of reasoned action (TRA), as TRA says that every behaviour of individual is backed by an intention to perform that behaviour. In this study, compensation serves as a stimulus to employee retention and turnover intentions. Ajzen and Fishbein (2005) further endorsed that TRA creates a link between employees' satisfaction and behaviour. Therefore, this study is adding insights into the influence of compensation on employee behaviour among healthcare organizations, especially in developing countries like Pakistan. The motivation to conduct this study has been the detrimental situation of the healthcare system in Pakistan, where lack of trust among doctors regarding compensation is increasing. In a country like Pakistan where the economy is in negative growth and the poverty is high (APP, 2021), the importance of compensation is undeniable. Therefore, based on the above arguments, we propose that taking compensation into consideration is a possible solution to high turnover intentions and low retention among doctors working in Pakistan. Similarly, we argue that the present study would contribute to the literature of management by studying the employees' intentions and behaviour, and compensation in a single study.
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Literature review
2.1 Theoretical framework
The present study used TRA to theoretically justify the relationship between compensation, job satisfaction, employee retention and turnover intentions. TRA was introduced by Fishbein and Ajzen (1975) as a theoretical model in the area of attitudes (Feeley, 2003). According to TRA, every action of a person or an organization is backed by a solid reason which encourages them to behave in a certain way (Ajzen & Fishbein, 2005). For organizations, these reasons can be better performance and employee retention. For employees, possible reasons can be better benefits, salary and working conditions. In this way, both parties behave positively based on their own interests. If the expectations of both parties meet at a certain point, the productivity will increase above the expectation. Meanwhile, any changes in one party's behaviour will bring about changes in the behaviour of the other party (Kim, Kim, & Goh, 2011). According to Fishbein and Ajzen (1975), TRA is useful in explaining the relationship between attitude, intention and behaviour. Organizations compensate their employees well with the intention to improve their performance and employee retention. The process works well under TRA by involving employees' psychology, resulting in an improved satisfaction among employees. According to McKinlay, Couston and Cowan (2001), the turnover intentions among satisfied employees are very low and happy employees prefer not to leave the existing job.
Several studies have provided empirical support to this theory. According to Hom and Hulin (1981), TRA involved psychological mechanisms which ended up in employee retention. TRA further affirms that an exchange process initiated by organization for providing economic benefits and helping employees mentally would result in the increase of employee satisfaction. In this process, positivity reduces the negativity which is the source of intention to leave (turnover) and converting that negativity into positive thinking about the organization will help in the decision to stay (employee retention). Similarly, the decreasing economic exchange increases the leaving intentions and consequently, actual turnover (Rahman & Syahrizal, 2019).
2.2 Hypotheses development
2.2.1 Compensation and employee retention. Compensation is the sum of all the benefits employees are receiving from the organization against their services (Delery et al., 2000). For instance, compensation represents an employee's benefits like financial (salary, pension, insurance or bonuses) or non-financial benefits (extra vacation, free travel, free medical or children's education) (Alhmoud & Rjoub, 2019). Pay is considered as a strong motivation to keep employees working with the organizations (Hausknecht, Rodda, & Howard, 2009). Previous literature has shown that compensation is the best technique for employee retention. Past studies have revealed that compensation has a significant positive relationship with employee retention (Rombaut & Guerry, 2020)...
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