J Bus Psychol (2008) 22:275–286
DOI 10.1007/s10869-008-9063-3
The Role of Pay Satisfaction and Organizational Commitment
in Turnover Intentions: A Two-Sample Study
Christian Vandenberghe Æ Michel Tremblay
Published online: 24 January 2008
Ó Springer Science+Business, LCC 2008
Abstract This paper reports the results of a two-sample
study—a sample of medical reps from pharmaceutical
companies (N = 232) and a sample of respondents from
multiple organizations (N = 221)—of the relationships
between pay satisfaction, organizational commitment, and
turnover intentions. Hypotheses were tested using a mul-
tidimensional perspective on both pay satisfaction and
organizational commitment. Results from both samples
show that the effect of pay satisfaction on intended
turnover is fully mediated by affective commitment and
perceived sacrifice commitment. Pay satisfaction is also
significantly related to normative commitment but the latter
has no influence on the outcome. Finally, in the sample of
medical reps, pay satisfaction significantly reduces com-
mitment based on lack of employment alternatives, a
finding that is interpreted in light of the characteristics of
pay systems in pharmaceutical companies. Future direc-
tions on compensation satisfaction and commitment
research are discussed.
Keywords Pay satisfaction
Organizational
commitment
Turnover intentions
Among rewards given by organizations in return for
employee contribution to working toward the achievement
of organizational goals, pay is thought to be a critical factor
(Heneman and Judge 2000; Milkovitch and Newman
2004). Monetary pay is often used as an incentive for
performance (Gardner et al. 2004) and as a means to retain
C. Vandenberghe (&)
M. Tremblay
École des Hautes Études Commerciales, 3000, Chemin de la
Côte Sainte-Catherine, Montreal, QC, Canada H3T 2A7
e-mail: christian.vandenberghe@hec.ca
the best employees (Trevor et al. 1997). However, authors
have for long stressed the fact that many employees per-
ceive pay allocations decisions to be unfair (Heneman and
Judge 2000; Tekleab et al. 2005) which may explain why
the link between actual pay and both performance and
employee retention has been found to be weak at best
(Currall et al. 2005; Motowidlo 1983; Tekleab et al. 2005;
Trevor et al. 1997).
Authors have thus examined the psychological mecha-
nisms involved in the perception of pay in order to better
understand its motivational impact. Among these mecha-
nisms, distributive justice, which refers to the perceived
fairness of the outcomes of decisions, and procedural jus-
tice, which represents the perceived fairness of the formal
process by which decisions are made are important ones
(Folger and Cropanzano 1998). Research has shown that
distributive and procedural justice represent major mech-
anisms through which pay attributes (e.g., level, raises) are
judged (Tremblay et al. 2000). When employees perceive
the ratio between their contribution and compensation to be
favorable as compared with that of relevant others (dis-
tributive justice), they are more satisfied with their pay
(Folger and Konovsky 1989; Gerhart and Rynes 2003;
Greenberg 1982; Livingstone et al. 1995; McFarlin and
Sweeney 1992). Similarly, the rules and procedures guid-
ing pay decisions and the information that accompanies
their implementation may foster procedural justice,
resulting in satisfaction with pay being higher (Folger and
Konovsky 1989; Tekleab et al. 2005). All in all, evidence
suggests that distributive and procedural justice are key
determinants of pay satisfaction.
Aside from the search for antecedents to pay satisfaction,
there is a need to better understand its consequences. The
purpose of this study is to examine the role of pay satisfaction in
turnover intentions, using organizational commitment as a
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potential mediator. We base our approach on two premises.
First, we account for the fact that previous research has largely
demonstrated the multidimensional nature of pay satisfaction
(Carraher and Buckley 1996; Currall et al. 2005; DeConinck
et al. 1996; Heneman et al. 1988; Heneman and Schwab 1985;
Judge 1993; Judge and Welbourne 1994; Mulvey et al. 1992;
Orpen and Bonnici 1987; Scarpello et al. 1988; Shaw et al.
1999), each facet contributing to an overall pay satisfaction
construct (Currall et al. 2005). The same could be said
regarding the organizational commitment construct (Becker
1992; Meyer and Allen 1991; 1997; O’Reilly and Chatman
1986). Second, we intend to determine the role of pay satis-
faction in turnover intention, while accounting for the influence
of organizational commitment which is known to be one of its
major determinants (Mathieu and Zajac 1990; Tett and Meyer
1993). Indeed, little research has addressed the roles of pay
satisfaction and organizational commitment as concurrent
predictors of intended or actual turnover (for an exception, see
Lum et al. 1998) and none seems to have used a multidimen-
sional perspective on these antecedents. We intend to fill that
gap in the literature by testing our hypotheses on two inde-
pendent samples of employees.
Pay Satisfaction and Turnover Intentions
Since the seminal work of Heneman and Schwab (1985),
wide evidence has been reported supporting the multidimen-
sionality of pay satisfaction. Despite early disagreements
regarding the exact number of factors contributing to define
pay satisfaction (Lam 1998; Mulvey et al. 1992; Orpen and
Bonnici 1987), a large majority of studies has shown that four
factors are at stake (Currall et al. 2005; Carraher and Buckley
1996; DeConinck et al. 1996; Heneman et al. 1988; Judge
1993; Judge and Welbourne 1994; Scarpello et al. 1988; Shaw
et al. 1999). These factors include satisfaction with (a) pay
level, (b) pay raises, (c) benefits, and (d) pay structure and
administration—the latter referring to the methods used
to determine compensation. Heneman and Schwab (1985)
argued that these facets represent distinct albeit related judg-
ments of pay satisfaction. For instance, an employee might be
satisfied with his/her salary level but not with its evolution
over time (raises). Pay raise satisfaction has been shown to be
more related to procedural justice since it reflects an appraisal
of how fair the organization has been in adjusting compen-
sation based on the performance of an employee (Tekleab
et al. 2005).
Research on the link between pay satisfaction and inten-
ded and actual turnover has been limited. Moreover, most of
that research has focused on satisfaction with pay level or
used an undifferentiated measure of pay satisfaction. That
work has shown that pay satisfaction significantly reduces
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J Bus Psychol (2008) 22:275–286
turnover intent (Dailey and Kirk 1992; DeConinck and
Stilwell 2004; Motowidlo 1983) but that its impact on actual
turnover is generally weak (Griffeth et al. 2000). Recently,
Tekleab et al. (2005) reported that pay raise satisfaction was
a significant predictor of intended and actual turnover but
that pay level satisfaction was not, introducing the possibility
that the different facets of pay satisfaction may play different
roles in the withdrawal process. However, a key limitation of
past research is that the role of organizational commitment as
a potential mediator in the pay satisfaction-intended/actual
turnover relationship has been neglected. An exception to
this trend is the work of Lum et al. (1998) who showed that
pay satisfaction had both direct and indirect effects on
turnover intent in a nursing context. The indirect effect of pay
satisfaction occurred through job satisfaction and organiza-
tional commitment. However, that study did not rely on
multidimensional models of pay satisfaction and organiza-
tional commitment.
Organizational Commitment as a Mediator
The most popular and thoroughly validated multidimen-
sional model of organizational commitment is Meyer and
Allen’s (1991). That model includes affective, normative,
and continuance components, all of which are thought to
contribute to employee retention. A recent meta-analytic
review of the model (Meyer et al. 2002) indicates that all
three components display negative associations with inten-
ded and actual turnover. Interestingly, the three components
correlated more strongly with actual turnover (-0.17 for
affective commitment, -0.16 for normative commitment,
and -0.10 for continuance commitment) in Meyer et al.’s
review than pay satisfaction did in Griffeth et al.’s (2000) (-
0.07), suggesting that commitment components are more
immediate antecedents of turnover. Along this line, we argue
that the inclusion of organizational commitment as a medi-
ator in the pay satisfaction-turnover relation should improve
our understanding of the mechanisms through which com-
pensation satisfaction influences the withdrawal process.
The investigation of such mediating linkages has been called
for by researchers (Williams et al. 2002) namely because pay
level satisfaction and overall pay satisfaction have been
reported to be only moderately related to withdrawal cog-
nitions and behaviors (Williams et al. 2006).
Accumulated findings suggest that commitment compo-
nents exert an influence on membership decisions through
different mechanisms. Employees with a strong affective
commitment stay with their organization based on the desire
to do so, while those with a strong normative commitment
stay based on the perceived obligation to do so (Meyer
and Herscovitch 2001). Regarding the contribution of
J Bus Psychol (2008) 22:275–286
continuance commitment to employee retention, one should
distinguish among its two sub-components—the perceived
sacrifice associated with leaving and the perceived lack of
alternatives (Bentein et al. 2005; Dunham et al. 1994;
Gakovic and Tetrick 2003; Hackett et al. 1994; Jaros
1997; Meyer et al. 1990; McGee and Ford 1987; Somers
1993; Stinglhamber et al. 2002). Indeed, as reported in
Meyer et al.’s (2002) meta-analytic review of the three-
component model, only the perceived sacrifice sub-component
of continuance commitment appears to be significantly and
negatively related to turnover intentions. Based on the above
arguments, we propose the following hypotheses.
Hypothesis 1a: Affective commitment will be negatively
related to turnover intentions.
Hypothesis 1b: Normative commitment will be negatively
related to turnover intentions.
Hypothesis 1c: Perceived sacrifice will be negatively
related to turnover intentions.
Hypothesis 1d: Perceived lack of alternatives will be
unrelated to turnover intentions.
Pay satisfaction may affect commitment components
through different mechanisms. Affective commitment
refers to a sense of identification with and involvement in
an organization (Meyer and Allen 1991). It is known to be
influenced by positive work experiences and perceptions of
support and justice. In this regard, the different facets of
pay satisfaction are reflective of the fact that the individual
feels valued, recognized, and fairly treated by the organi-
zation (Tekleab et al. 2005). This should result in stronger
affective commitment. Normative commitment refers to a
loyalty and sense of debt toward the organization based on
moral obligation and typically develops as a result of
socialization practices (Meyer and Allen 1991). Satisfac-
tion with such facets as pay raise and benefits may be
related to normative commitment through the norm of
reciprocity because it would signal to the individual that
he/she has received a fair amount of resources from the
organization, hence creating a sense of indebtedness.
Indirect support for the above predictions can be found in
empirical research that examined the links between differ-
ent facets of pay satisfaction and perceptions of pay
characteristics and job attitudes. For example, Williams
et al. (2002) reported benefit level and benefit system
satisfaction to be positively related to overall job satisfac-
tion, while Dulebohn and Martocchio (1998) found that
besides pay satisfaction, such perceptions as understanding
of pay plan and belief in pay plan effectiveness correlated
positively with affective-based organizational commit-
ment. There is thus evidence that pay satisfaction and its
components play a role in the development of positive
attitudes regarding the organization. We thus propose the
following hypotheses.
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Hypothesis 2a: Pay satisfaction will be positively related
to affective commitment.
Hypothesis 2b: Pay satisfaction will be positively related
to normative commitment.
We expect pay satisfaction to relate to both sub-dimensions
of continuance commitment, for different reasons. For one
thing, if the individual is satisfied with his/her compensa-
tion, the cost associated with leaving increases, leading to a
higher sacrifice being incurred in case of exit. On the other
hand, consistent with fairness heuristic theory (van den Bos
et al. 1997), pay satisfaction conveys information regard-
ing the relative standing of the individual within the
organization, with higher satisfaction suggesting a higher
perceived value conferred by the organization (Tekleab
et al. 2005), which ultimately should reduce commitment
based on the absence/lack of employment alternatives. This
leads to the following hypotheses.
Hypothesis 2c: Pay satisfaction will be positively related
to perceived sacrifice.
Hypothesis 2d: Pay satisfaction will be negatively
related to perceived lack of alternatives.
Figure 1 presents the theoretical model and summarizes the
hypotheses of this study. In the model, the facets of pay
level, pay raise, benefits, and structure and administration
are viewed as separate facets of an overall pay satisfaction
construct. This representation of pay satisfaction as a
second-order factor has been empirically supported as the
most parsimonious way to portray its influence on turnover
intentions and other organizational outcomes (Currall et al.
2005). In our model, the effect of pay satisfaction on
turnover intentions is fully mediated by organizational
commitment components.
Method
Two independent samples of employees were chosen for
testing our hypothesized model. The first sample included
medical reps from two pharmaceutical companies. This
sample was particularly suitable for the purposes of this
study since pharmaceutical companies typically use mon-
etary pay and its components as bases for retaining their
best reps. The second sample was drawn from multiple
organizations on a convenience basis. This second sample
was used as a means to test the generalizability of the
findings from the first sample.
Samples and Procedure
All data were collected in Belgium using a French version
of the survey scales. We used a translation-back-translation
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278
Fig. 1 Structural model of the
effects of pay satisfaction on Level
turnover intentions through
organizational commitment. .96*** (.97***)
Completely standardized
parameters for the multi- Raise
organization sample (Sample 2)
are in parentheses while those .87*** (.89***)
for the pharmaceutical sample
(Sample 1) are not. Level, raise,
.88*** (.96***)
benefits, and structure and Benefits
administration are the four pay
satisfaction facets. Hypotheses
.92*** (.93***)
are in bold. ** p \ 0.01;
*** p \ 0.001 Structure and
administration
procedure for translating items that were not available in
French (pay satisfaction items) in order to minimize dis-
crepancy with the original version of the scales (Brislin
1980).
Sample 1
We obtained agreement from two pharmaceutical compa-
nies to deliver an opinion survey to their medical reps
regarding their compensation satisfaction. Potential par-
ticipants received the survey packet at their home address
and were invited to send their completed questionnaires to
the lead researcher’s office using a pre-stamped, pre-
addressed envelope. The survey packet included a cover
letter explaining the objectives of the study and assured
participants of the confidentiality of responses. Two weeks
later, follow-up letters stressing the value of participating
in the study were sent to non-respondents. In total, 232
usable questionnaires were returned, for an overall
response rate of 46.4%. One hundred and twenty-nine
completed questionnaires were received within the first
company, for a response rate of 51.6%. Average age was
36.57 years (SD = 8.25) and average tenure was
10.16 years (SD = 7.55). Respondents were mostly
women (60.5%). In the second company, 103 completed
questionnaires were received, for a response rate of 41.2%.
Average age was 36.86 years (SD = 9.50) and average
tenure was 9.85 years (SD = 7.66). Respondents were
mainly men (56.9%). We combined responses from the two
companies within the same sample because respondents
did not significantly differ on substantive variables.
Sample 2
The second sample was obtained from multiple organiza-
tions on a convenient basis using two different means.
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J Bus Psychol (2008) 22:275–286
.55*** (.45***) Affective -.52*** (-.46***)
commitment
H2a (+)
H1a (-)
Pa y .20** (.42***) -.28*** (-.38***)
Turnover
satisfaction High
H2c (+) intentions
sacrifice H1c (-)
H2d (-)
-.32*** (-.05) .05 (.07)
Lack of H1b (-)
H2b (+) alternatives
.11 (-.03)
.27*** (.28***)
Normative
commitment
First, we contacted friends or acquaintances on a personal
basis and asked them to respond to the survey. These
persons were also asked to contact friends of their own who
had a full-time job in order to have them complete the same
survey. Overall, 235 questionnaires were distributed and 98
usable ones were received in return, for a response rate of
41.70%. Second, we created a page on the university
website and put the survey questionnaire for online com-
pletion. In order to attract respondents to the online survey,
we contacted several alumni associations of schools of
engineering and emailed members that we were conducting
an opinion survey about compensation satisfaction for
which we requested their participation. They were
informed that the survey served research purposes only.
The email contained the website address where participants
could find the questionnaire online. Using this technique,
123 questionnaires were completed and usable. In total, we
obtained 221 usable responses. Responses were combined
because no significant differences were found on substan-
tive variables among respondents between the two survey
techniques. Respondents had an average age of 32.64
(SD = 8.26) and an average tenure of 5.09 (SD = 5.45).
Among respondents, 81.45% were female.
Measures
Pay Satisfaction
We used the 18-item version of the Pay Satisfaction
Questionnaire (PSQ; Heneman and Schwab 1985) which is
the most popular multifaceted measure of the construct (see
Carraher and Buckley 1996 for a full presentation of the
items). The PSQ is composed of four scales measuring
satisfaction with pay level (four items), satisfaction with
benefits (four items), satisfaction with pay raise (four
items), and satisfaction with pay structure and adminis-
tration (six items). We obtained satisfactory alpha
J Bus Psychol (2008) 22:275–286
coefficients for these scales in both samples of this study:
0.95 and 0.96 for pay level, 0.93 and 0.96 for benefits, 0.80
and 0.82 for pay raise, and 0.87 and 0.89 for structure and
administration.
Organizational Commitment
Although we relied on the three-component commitment
model developed by Meyer and Allen (1991) and Allen and
Meyer (1990), we used a refined measure of the model used
in a French context (Bentein et al. 2005). That measure
includes items capturing affective commitment (six items;
e.g., ‘I really feel that I belong in this organization’),
normative commitment (six items; ‘I think I would be
guilty if I left my current organization now’), perceived
sacrifice (three items; e.g., ‘I would not leave this organi-
zation because of what I would stand to lose’), and
perceived lack of alternatives (three items; ‘I feel that I
have too few options to consider leaving this organiza-
tion’). Reliabilities for these scales were satisfactory in
both samples of the study: 0.87 and 0.84 for affective
commitment, 0.89 and 0.91 for normative commitment,
0.72 and 0.77 for perceived sacrifice, and 0.83 and 0.84 for
perceived lack of alternatives.
Turnover Intentions
We measured turnover intentions using a 3-item scale (e.g.,
‘I intend to search for a position with another employer
within the next year’) that has been used in French in pre-
vious research (Vandenberghe et al. 2002). The reliability
for this scale was 0.93 in Sample 1 and 0.94 in Sample 2.
Responses were provided on 5-point Likert-type agree-
ment scales. Anchors for the items ranged from
1 = strongly disagree to 5 = strongly agree.
Data Analysis
The pay satisfaction and organizational commitment items
were subjected to separate confirmatory factor analyses
using LISREL 8.72 (Jöreskog et al. 2001). Our decision
rules for evaluating descriptive indices of fit were that, to
indicate a good fit, the non-normed fit index (NNFI) and
comparative fit index (CFI), as measures of incremental fit,
had to be equal to or greater than 0.90. Further, the root mean
square residual (RMSEA) as a measure of absolute fit had to
be inferior to 0.08 to demonstrate reasonable fit (Browne and
Cudeck 1993). Chi-square difference tests were used to
compare nested models (Bentler and Bonett 1980).
The hypothesized model depicted in Fig. 1 was tested
using the following rules. First, we capitalized on Currall
279
et al.’s (2005) work who showed that even if pay satis-
faction facets portray distinguishable aspects of the
appraisal of compensation components, they contribute to
an overall second-order latent construct, pay satisfaction.
Indeed, these authors provided evidence that such a rep-
resentation was a more parsimonious description of the
way pay satisfaction influenced organizational outcomes
including turnover intentions than a model in which the
separate facets were allowed to have direct links with the
outcomes. In order to limit the number of parameters to be
estimated in our model, we created aggregate indicators for
each pay satisfaction facet. To compensate for measure-
ment error, the paths from the first-order pay satisfaction
facets latent variables were set to the square root of the
scale reliability. In addition, the error variance was set to
equal the variance of the scale multiplied by one minus the
reliability (Hayduk 1987). Second, we used commitment
components as mediators of the effect of pay satisfaction
on turnover intentions. We did however account for the
fact that commitment components have been found to
correlate at least moderately with each other in previous
research (Meyer et al. 2002) and thus allowed the error
terms associated with their latent constructs to correlate.
Finally, we examined the possibility of a partial mediation
model by checking whether freeing the path from pay
satisfaction to turnover intentions would significantly
increase model fit.
Results
Confirmatory Factor Analyses
Table 1 provides the fit indices for the confirmatory factor
analysis models of pay satisfaction and organizational
commitment for the two samples. As can be seen, the four-
factor model of pay satisfaction displays the best absolute fit
indices as compared with those of simpler representations
of the data. Moreover, it represents a significant improve-
ment over other models, such as the three-factor
model combining raise and structure and administration scales,
v2diff. (3) = 116.81, p \ 0.001 (Sample 1), and v2diff. (3) =
77.53, p \ 0.001 (Sample 2). Similarly, the hypothesized
four-factor structure of organizational commitment is sup-
ported and superior to simpler models such as a three-factor
model in which perceived sacrifice and perceived lack of
alternatives are combined to form an overall continuance
commitment scale, v2diff. = 119.05, p \ 0.001 (sample 1),
and v2diff. (3) = 279.92, p \ 0.001 (sample 2).
Descriptive statistics and correlations for the study are
reported in Table 2. Several findings are worth comment-
ing on. First, in both samples, pay satisfaction facets
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Table 1 Confirmatory factor analyses of pay satisfaction and organizational commitment items: fit indices
Pharmaceutical sample (N = 232) Multi-organization sample (N = 221)
2 2
v (df) NNFI CFI RMSEA Dv (Ddf) v2(df) NNFI CFI RMSEA Dv2(Ddf)

Pay satisfaction
One-factor 1,426.96** (135) 0.52 0.58 0.20 – 1,601.57** (135) 0.52 0.58 0.27 –
Two-factor (combining raise, 739.06** (134) 0.77 0.80 0.14 687.90** (1) 893.50** (134) 0.75 0.78 0.22 708.07** (1)
level, and structure and
administration)
Three-factor (combining raise, 294.06** (132) 0.94 0.95 0.07 445.00** (2) 375.04** (132) 0.92 0.93 0.10 518.46** (2)
and structure and administration)
Four-factor 177.25** (129) 0.98 0.98 0.04 116.81** (3) 297.51** (129) 0.94 0.95 0.08 77.53** (3)
Organizational commitment
One-factor 1,133.60** (135) 0.46 0.53 0.18 – 976.02** (135) 0.76 0.79 0.20 –
Two-factor (combining affective 829.10** (134) 0.62 0.67 0.15 304.50** (1) 797.76** (134) 0.81 0.84 0.18 178.26** (1)
commitment with normative
commitment, and perceived
sacrifice with perceived lack
of alternatives)
Three-factor (combining perceived 386.34** (132) .86 .88 .09 442.76** (2) 519.48** (132) .89 .90 .12 278.28** (2)
sacrifice with perceived lack
of alternatives)
Four-factor 267.29** (129) 0.92 0.93 0.07 119.05** (3) 239.56** (129) 0.97 0.97 0.07 279.92** (3)
2
The Dv (columns report differences between the target model and the closest one in the sequence of nested models
Note: NNFI, non-normed fit index; CFI, comparative fit index; RMSEA, root mean square error of approximation
** p \ 0.01
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 J Bus Psychol (2008) 22:275–286

Table 2 Descriptive statistics and correlations for the study variables

Variable M SD 1 2 3 4 5 6 7 8 9 10 11 12 13 M SD

1. Sex 1.53 0.50 – 0.26** 0.21** 0.00 -0.09 0.05 0.05 -0.02 0.08 0.01 -0.08 -0.06 0.01 1.81 0.39
2. Age 36.70 8.79 0.20** – 0.65** 0.17* 0.15* 0.03 0.21** 0.13* 0.28** 0.02 0.32** 0.30** -0.19** 32.64 8.26
3. Organizational tenure 10.03 7.58 0.12 0.79** – 0.11 0.15* 0.03 0.11 0.05 0.18* -0.09 0.22** 0.16* -0.14* 5.09 5.45
4. Pay satisfaction 3.18 0.62 0.07 0.10 0.02 – 0.82** 0.81** 0.82** 0.82** 0.35** 0.21** 0.26** -0.04 -0.36** 2.88 0.80
5. Pay level 3.23 0.85 0.04 0.08 0.02 0.82** – 0.54** 0.55** 0.58** 0.24** 0.09 0.21** 0.04 -0.23** 3.18 0.96
6. Pay raise 2.96 0.86 0.11 0.01 -0.07 0.80** 0.55** – 0.52** 0.64** 0.33** 0.28** 0.18** -0.09 -0.35** 2.72 0.93
7. Benefits 3.59 0.80 -0.07 0.14 0.12 0.67** 0.39** 0.30** – 0.50** 0.24** 0.11 0.19** -0.08 -0.24** 2.95 1.17
8. Structure and 2.92 0.68 0.14* 0.09 -0.02 0.82** 0.59** 0.63** 0.41** – 0.34** 0.23** 0.30** -0.00 -0.37** 2.69 0.88
administration
9. Affective commitment 3.30 0.86 0.23** 0.21** 0.09 0.47** 0.31** 0.34** 0.35** 0.50** – 0.53** 0.40** -0.06 -0.61** 3.36 0.85
10. Normative commitment 2.14 0.90 0.13* 0.04 -0.03 0.22** 0.19** 0.18** 0.04 0.28** 0.45** – 0.29** 0.01 -0.41** 2.52 1.06
11. Perceived sacrifice 2.61 0.94 0.06 0.31** 0.30** 0.16* 0.15* 0.09 0.13 0.13* 0.25** 0.38** – 0.25** -0.53** 2.89 1.02
12. Perceived lack of 2.40 1.03 0.03 0.31** 0.28** -0.26** -0.21** -0.27** -0.10 -0.24** -0.20** 0.08 0.47** – 0.03 1.89 1.02
alternatives
13. Turnover intentions 1.80 1.08 -0.12 -0.27** -0.17* -0.40** -0.31** -0.32** -0.32** -0.27** -0.54** -0.29** -0.27** 0.05 – 2.43 1.27
Note: Ns = 189–232 for pharmaceutical sample; N = 221 for multi-organization sample. Correlations for the pharmaceutical sample are reported below the diagonal and variable means and
standard deviations appear on the left-hand columns while correlations for the multi-organization sample are reported above the diagonal and variable means and standard deviations appear on
the right-hand columns. For Sex, 1 = Female, 2 = Male. Variables 5–8 represent the pay satisfaction facets. * p \ 0.05; ** p \ 0.01
281

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correlate moderately to strongly with each other—with
correlations ranging from 0.39 to 0.63 in Sample 1 and
from 0.50 to 0.64 in Sample 2—suggesting that they rep-
resent complementary albeit distinguishable elements of
pay satisfaction. Second, in Sample 1, overall pay satis-
faction correlated more strongly with turnover intentions
(r = -0.40, p \ 0.01) than any particular satisfaction
facet, whereas in Sample 2, only satisfaction with pay
structure and administration correlated more strongly with
turnover intentions (r = -0.37, p \ 0.01) than pay satis-
faction (r = -0.36, p \ 0.01). In the aggregate, these
findings suggest that overall pay satisfaction is a more
salient predictor of intended turnover than its particular
components. Table 2 also shows that some commitment
components are more strongly related to turnover inten-
tions than pay satisfaction. But here findings vary across
the two samples. In the pharmaceutical sample, only
affective commitment is more strongly related to turnover
intentions (r = -0.54, p \ 0.01) than pay satisfaction
whereas in the multi-organization sample, affective com-
mitment (r = -0.61, p \ 0.01), normative commitment
(r = -0.41, p \ 0.01) and perceived sacrifice (r = -0.53,
p \ 0.01) are all more strongly correlated with the outcome.
All in all, some commitment components may thus be more
immediate antecedents of turnover intentions than pay
satisfaction. A final finding worth mentioning is that pay
satisfaction displays a positive correlation with all commit-
ment components except perceived lack of alternatives with
which it correlates negatively in the pharmaceutical sample
(r = -0.26, p \ 0.01) and is unrelated in the multi-organi-
zation sample (r = -0.04, ns).
The hypothesized model described in Fig. 1 was tested
using LISREL 8.72. The model fit the data well in both
samples, v2(261) = 484.95, p \ 0.01, CFI = 0.96, NNFI =
0.97, RMSEA = 0.059 (Sample 1), and v2(261) = 446.80,
p \ 0.01, CFI = 0.97, NNFI = 0.97, RMSEA = 0.065
(Sample 2). We then examined whether organizational
commitment components fully mediated the effect of pay
satisfaction on turnover intentions by freeing the direct path
from pay satisfaction to turnover intentions. Note that,
because freeing that path in our theorized model resulted in an
underidentified model, the correlations among error terms
associated with commitment forms were set to zero. This
procedure was chosen because it helped solving identification
problems, and the correlations among commitment forms
were not subjected to hypothesis testing. In both samples, the
addition of a direct path from pay satisfaction to turnover
intentions yielded a non-significant improvement in model fit,
v2diff. (1) = 0.49, ns (Sample 1), and v2diff. (1) = 0.46, ns
(Sample 2), and the path was non-significant in either case.
Completely standardized parameters for the hypothe-
sized model are shown in Fig. 1. Of importance, the
contribution of the second-order factor of pay satisfaction
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J Bus Psychol (2008) 22:275–286
in the first-order facets was sizeable (average cs = 0.91 in
Sample 1 and 0.94 in Sample 2). This provides strong
support for depicting pay satisfaction as a higher-order
construct that subsumes first-order facet satisfaction fac-
tors. Figure 1 also shows that the mediation effect of
commitment in the pay satisfaction-turnover intentions
relationship was attributable to affective commitment and
perceived sacrifice which were significantly explained by
pay satisfaction (cs = 0.55, p \ 0.001, in Sample 1, and
0.45, p \ 0.001, in Sample 2, for affective commitment;
cs = 0.20, p \ 0.01, in Sample 1, and 0.42, p \ 0.001, in
Sample 2, for perceived sacrifice) and significantly reduced
turnover intentions in both samples (bs = -0.52,
p \ 0.001, in Sample 1, and -0.46, p \ 0.001, in Sample
2, for affective commitment; bs = -0.28, p \ 0.001, in
Sample 1, and -0.38, p \ 0.001, in Sample 2, for per-
ceived sacrifice). Hypotheses 1a and 1c and 2a and 2c are
thus fully confirmed. Although pay satisfaction signifi-
cantly predicted normative commitment (cs = 0.27,
p \ 0.001, in Sample 1, and 0.28, p \ 0.001, in Sample 2),
yielding support for Hypothesis 2b, the latter was unrelated
to intended turnover in either sample (bs = 0.11, ns, in
Sample 1, and -0.03, ns, in Sample 2), which contradicts
Hypothesis 1b. Finally, pay satisfaction also negatively
affected perceived lack of alternatives among the sample of
medical reps (c = -0.32, p \ 0.001), hence reducing their
perception that employment alternatives would be lacking,
a finding that was not replicated in the multi-organization
sample (c = -0.05, ns). Hypothesis 2d is thus only partly
supported. That discrepancy may be explained by the
specificity of pharmaceutical companies who often use
monetary pay to retain their high-performing reps. Finally,
as predicted by Hypothesis 1d, perceived lack of alterna-
tives was unrelated to turnover intentions in either sample
(bs = 0.05, ns, in Sample 1, and 0.07, ns, in Sample 2).
Further understanding of the relative importance of pay
satisfaction in the prediction of turnover intentions could
be gained from estimating its indirect effect through
affective commitment and perceived sacrifice, using a
procedure outlined by Sobel (1987). In the pharmaceutical
sample, this indirect effect was -0.59 (SE = 0.10) while in
the multi-organization sample it was -0.64 (SE = 0.11).
The fact that the 95% confidence intervals did not include
zero in both samples (-0.39/-0.79 in Sample 1; -0.42/
-0.86 in Sample 2) suggests that the indirect effect of pay
satisfaction on turnover intentions through affective
commitment and perceived sacrifice, was significant.
Discussion
This study used a multidimensional perspective on pay
satisfaction and organizational commitment to determine
J Bus Psychol (2008) 22:275–286
their respective roles in the explanation of turnover inten-
tions. In doing so, we were filling a gap since, to the best of
our knowledge, one counts no prior investigation that
addressed this issue in detail. On both practical and theo-
retical grounds, our study addressed some important
concerns. From a practical point of view, it raised the
question as to the role of compensation satisfaction in
retention policies. As noted by Heneman and Judge (2000),
organizations use pay systems to get more performance
from their employees and to retain those they do not want to
lose. Along these lines, researchers demonstrated that
overall pay satisfaction reduces turnover intent and actual
turnover, even if some have argued (Gerhart and Rynes
2003) and shown (Tekleab et al. 2005) that satisfaction with
pay raise is the most salient element of pay satisfaction
liable to influence turnover. Our study offers supporting
evidence that compensation satisfaction, whatever its
dimensions, is a key element in retention policies because it
helps strengthening the link with the organization.
On theoretical grounds, our study contributed to fill the
gap between research devoted to the study of the pay sat-
isfaction-turnover relationship (Currall et al. 2005; Dailey
and Kirk 1992; DeConinck and Stilwell 2004; Lum et al.
1998; Motowidlo 1983; Tekleab et al. 2005) and the large
stream of research that focuses on the link between orga-
nizational commitment and turnover (Mathieu and Zajac
1990; Meyer et al. 2002; Tett and Meyer 1993). Two issues
warranted further investigation. First, limited and contra-
dictory findings have been reported concerning the direct
versus indirect effects of pay satisfaction on intended or
actual turnover. On the one hand, there are indications that
pay satisfaction may influence intended or actual turnover
directly but they come from studies that did not control for
organizational commitment (Currall et al. 2005; Mot-
owidlo 1983; Tekleab et al. 2005). On the other hand,
among studies that controlled for commitment, one has
found a direct effect of pay satisfaction on withdrawal
cognitions (DeConinck and Stilwell 2004) and the other
has reported evidence for both a direct and an indirect
effect (Lum et al. 1998). However, none of these studies
have considered the prevailing view that commitment is
multidimensional in nature (Becker 1992; O’Reilly and
Chatman 1986; Meyer and Allen 1991).
Relying on the three-component model of commitment
(Meyer and Allen 1991) and its refinements (Bentein et al.
2005; Dunham et al. 1994; Gakovic and Tetrick 2003;
Hackett et al. 1994; Jaros 1997; Meyer et al. 1990; McGee
and Ford 1987; Somers 1993), we found that two com-
mitment dimensions, affective commitment, and perceived
sacrifice, fully mediated the effect of a higher-order pay
satisfaction construct incorporating satisfaction with pay
level, raise, benefits, and structure and administration, on
turnover intentions. This finding is consistent with theory
283
that would predict that the appraisal of compensation ele-
ments may convey feelings of support and justice that are
known to be critical factors in the development of affective
bonds between the individual and the organization. The
finding of a mediation effect through perceived sacrifice is
also theoretically meaningful since perceived sacrifice
reflects the cost associated with leaving that could be fos-
tered in case the individual appraises his/her compensation
package to be favorable.
Our findings also reveal that normative commitment and
perceived lack of alternatives have less important roles in the
turnover process and in any case do not mediate the effect of
pay satisfaction on exit cognitions. Pay satisfaction was
significantly related to normative commitment, suggesting
that positive judgments regarding the various facets of pay
engender feelings of indebtedness. It is likely that this occurs
though the activation of the norm of reciprocity (Gouldner
1960). However, these feelings do not translate into exit
intentions. This is reminiscent of recurrent concerns
expressed regarding the validity of normative commitment
(Ko et al. 1997). Basically, it seems that the breadth of the
affective commitment construct and its natural association
with normative commitment makes it difficult for normative
commitment to be uniquely predictive of outcomes when
affective commitment is controlled for. As argued by Meyer
and Herscovitch (2001), normative commitment may
emerge as a more powerful predictor when affective com-
mitment is low. More work is needed to identify the
conditions under which normative commitment becomes a
relevant predictor of work outcomes.
Our two-sample validation procedure allowed us to deter-
mine whether linkages within the theorized model were
generalizable. Results show that one path differed signifi-
cantly across samples, the link between pay satisfaction and
perceived lack of alternatives. More precisely, pay satisfac-
tion was negatively related to perceived lack of alternatives
in the pharmaceutical sample (b = -0.32, p \ 0.001) while
it was unrelated to it in the multi-organization sample
(b = -0.05, ns). This suggests that in some respect, com-
pensation satisfaction plays a different role as a determinant of
employee attitudes in pharmaceutical companies. A look at
Table 2 reveals that satisfaction is higher on all pay facets in
Sample 1 (pharmaceutical companies) as compared to Sample
2 (multiple organizations), but the difference is most striking
on the benefits scale (M = 3.59 vs. M = 2.95). This is not
surprising because pharmaceutical companies located in
Belgium extensively use this aspect of compensation—
offering such advantages as a free company car, multiple
business/leisure travels in attractive cities and countries with
clients, etc.—to retain and attract the best medical reps on the
market.
The negative relationship between pay satisfaction and
perceived lack of alternatives among medical reps suggests
123
284
that specific mechanisms are operating in pharmaceutical
companies. First, individuals working in these companies
may be typically motivated by monetary incentives, sug-
gesting that these companies are attracting employees with
different personality profiles. This is consistent with
Schneider’s (1987) attraction-selection-attrition model.
Second, it might be that the very fact of relying on well–
established merit pay systems—with bonuses reaching
sometimes more than 25% of medical reps’ base salary—
makes satisfaction with pay an indicator of job perfor-
mance in pharmaceutical companies. Further, the fact that
performance is measured on a monthly basis using very
efficient information systems shared by Belgian pharma-
ceutical companies and that all competitors use similar
pay-for-performance compensation systems renders medi-
cal reps’ performance highly visible on the market. This
could be the very reason why medical reps’ pay satisfaction
lowered commitment based on perceptions of a lack of
employment alternatives, performance visibility being a
potential underlying mechanism (Allen and Griffeth 2001).
Limitations and Directions for Future Research
This study is not without limitations. First, the fact that data
were collected from the same source and at the same point in
time leads to concerns about common method variance.
Moreover, the direction of causality cannot be firmly dem-
onstrated since the possibility exists that commitment may
lead to pay satisfaction rather than the reverse. However, our
findings are consistent with the presumed theoretical linkages
between pay satisfaction, commitment, and turnover (e.g.,
Lum et al. 1998; Mobley et al. 1979; Porter and Steers 1973).
Further investigation of the role of multifaceted pay satis-
faction and commitment forms in the withdrawal process is
warranted using actual rather than intended turnover. We also
invite more replications using a variety of occupations and
organizations. It is indeed likely that pay systems vary across
contexts and shape pay satisfaction and its influence on
affective and cognitive reactions toward the organization.
To summarize, our study provided evidence that a
higher-order construct of pay satisfaction subsuming sat-
isfaction with specific pay facets reduced turnover
intentions by enhancing employees’ affective commitment
to their organization and increasing the sacrifice or cost
associated with leaving. Higher pay satisfaction levels were
also associated with stronger normative commitment and,
among our sample of medical representatives, with a
reduced perception of a lack of employment alternatives.
Future research should examine whether other variables
mediate the effect of pay satisfaction on withdrawal cog-
nitions and behaviors, such as for example intrinsic work
motivation (Kuvaas 2006).
123
J Bus Psychol (2008) 22:275–286
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