The Mediating Role of Perceived Organizational Support on the Relationship between Pay and Intention to Stay

INTRODUCTIONEmployee retention issue continues to be a main concern for employers in various sectors and industries in Malaysia. According to Arora (2016), organizations now are actively addressing about employee retention. Technology sector companies across AsiaPacific continue to face high levels of employee turnover despite ongoing economic uncertainty around the globe. Employee voluntary turnover rates now exceed 10% in all major Asia-Pacific markets. India leads the region with a trailing 12-month voluntary turnover rate of 13.6%, followed by Malaysia at 13.0% (Aon Hewitt TCM Survey, 2017). Statistical data from survey which was conducted by independent agencies in Malaysia shows an essential rate of employee turnover. A survey conducted by JobStreet.com found that 38% of the respondents concern about retaining valuable employees in 2016. Another study also shows consistent facts on employee turnover rate. For instance, Malaysia recorded the second highest involuntary turnover rate at 6.0% and third highest voluntary turnover rate at 9.5% in 2015 in South East Asia (Aon Hewitt TCM Survey, 2015). In addition, 36% of employees are intends to leave the organization within two years (Tower Watson Survey, 2014). In the ICT industry, a high turnover rate was recorded in the ICT based-business such as outsourcing and shared business services between 32 to 39 percent per annum in 2008 (Patrick, 2008). Since organizations won't be able to function properly with inadequate information technology workers, it is important for the organizations to prevent this problem from continuing, and to do so organizations need to know what factors may influence intention to stay among information technology skilled workers.Discussion on employee turnover above gives instant reaction particularly to look at the influences of organizational practices on this issue. One of important organizational practice that requires serious examination is pay management and organizational support. The role of pay in addressing employee turnover needs to be discussed from pay equity perspective. Fundamental assumption of this view is employee must be paid fairly. Typically, if an employee feels that he or she works harder than another employee who receives a higher rate of pay, he or she may leave the organization for a higher paying opportunity. This is because highly paid employees tend to be more determined to remain in their organization. Another aspect is level of organizational support. Organizational support may be viewed from many approaches such as human resource practices, financial, culture, job design, work environment and supervisor support. Thus, in the present study, pay is examined to understand it influences on employee retention, especially among IT employees in organization. The study also examines the mediating role of perceived organizational support on the relationship between pay and intention to stay.LITERATUR REVIEWPay and Intention to StayEmployee retention refers to the desire of workers to remain working in the current organization (Coombs, 2009; Ellenbecker, 2004). However, intention to stay is not a popular variable for research as compared to intention to leave. A review of currently available literatures has showed that many studies focuses on intention to leave instead of intention to stay (Allen, 2006; Spreitzer & Mishra, 2002). Previous studies have also used the concept of intention to stay as a proxy to explain employee retention (Coombs, 2009; Chew & Chan, 2008; Ellenbecker, 2004). This approached provides further validation to the assumption by Ajzen (1991) that intention is the strongest cognitive precursor of behavior. Based on this premise, the present study used the same approach where intention to stay is a proxy for understanding employee retention. Intention to stay is more relevant in the current research because of the difficulties encountered by organization in retaining their skilled IT workers, and also previous study did not specifically examines the intentions of skilled IT workers to stay in organization (Humayun & Zhao, 2009; Punia & Sharma, 2008). …