Workgroup Salary Dispersion and Turnover Intention in China

WORKGROUP SALARY DISPERSION

AND TURNOVER INTENTION

IN CHINA: A CONTINGENT

EXAMINATION OF INDIVIDUAL

DIFFERENCES AND THE DUAL

DEPRIVATION PATH EXPLANATION

W E I H E , L I - R O N G L O N G , A N D B Å R D K U VA A S

The present study generalizes previous pay dispersion research to the Chinese

context by examining the cross-level relationship between workgroup salary dispersion and employee turnover intention contingent on individual differences.

Field survey data including annual objective salary and self-reported attitudes

among 370 Chinese employees in 51 organizational workgroups supported our

cultural predictions by showing that the relationship between workgroup salary dispersion and turnover intention was positive only among employees with

higher rather than lower levels of Chinese traditionality and among those with

lower rather than higher salary levels. Furthermore, the results of mediated

moderation analyses suggest that a dual-deprivation path model can explain the

above relationships. We discuss the theoretical, cultural, and practical implications of these findings for organizations. © 2015 Wiley Periodicals, Inc.

Keywords: salary dispersion, Chinese traditionality, turnover intention

Introduction

E

mployee turnover is a challenge for organizations and managers not only because

of the decreased firm performance followed by the loss of talent, but also due to

the expensive replacement cost associated

with hiring, selecting, and training the alternatives

(Allen, Bryant, & Vardaman, 2010). The problem

of voluntary turnover is particularly serious in

transitional China, where significant changes in

employee-organization relationships (EORs) are

taking place as a result of economic reforms (Tsui,

2006). One of the significant changes is the abolition of the guaranteed lifelong employment (also

known as the “iron rice bowl”) policy, leading

to more frequent voluntary turnover in Chinese

firms (Hom et al., 2009)....