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Chinese employees' work values and turnover intentions in multinational

companies: the mediating effect of pay satisfaction

by Christina Yu-Ping Wang, Mei-Huei Chen, Bill Hyde, Lillian Hsieh

Workers in the People's Republic of China have become accustomed to the varyingaspects of employment. Today, many view job choice and turnover intent as distinct

aspects of work and are aware that these are directly related to their job. However, since

this was not always the case this new attitude of workers has created problems in the

current labor market in China. Younger generations of Chinese workers have become

individualistic and materialistic and also tend to seek more challenges and changes, thus

causing them to pursue better employment opportunities and seek higher wages (Ralston,

Egri, Stewart, Terpstra, & Kaicheng, 1999).

From a human resource management (HRM) perspective, these conditions have created

other problems that are associated with employment in China. Allen and Meyer (1996)

found that turnover intentions were negatively associated with organizational

commitment. This indicated that attention needs to be given to the strategies that are used

currently to prevent employee turnover. Turnover is costly to an organization because of

the losses that are associated with it (Lum, Kervin, Clark, Reid, & Sirola, 1998). HRM

professionals need to focus their efforts on reducing employee turnover in order for

Chinese businesses and industries to operate efficiently.

Mitchel (1981) concluded that if personal and organizational context variables have any

effect on turnover or turnover intention, it is probably through role perceptions. Althoughresearchers have examined the effect of commitment on turnover intention, of pay

satisfaction on organizational commitment, and of work values on organizational

commitment, few have tried to determine if there is a relationship between these factors

in a Chinese context. To predict turnover intention adequately it is necessary to examine

current Chinese employee work values and the factors that are related to these.

In the current study we examined literature on the topic of current employment issues in

China. It became apparent that multinational corporations operating in China (MNCs)

need to address present employment issues so that they can continue to meet the

challenges and changes that continue to evolve in a corporation today. MNC managershave been found to experience a variety of problems with workers, some of which

resulted from cultural differences. However, it was also thought that these problems were

related to the fact that industry in China continues to undergo changes.

LITERATURE REVIEW



CHINESE CULTURAL VALUES

In a survey of values, Hofstede (1980a) identified four cultural dimensions; power

distance, uncertainty avoidance, individualism/collectivism, and masculinity/femininity.

However, it should be noted that in the analysis of data in the survey of Chinese values a

dimension that resembled uncertainty avoidance was not found. In contrast, the fourth

dimension in the data was rooted in the teachings of Confucius. Chinese people are

known for having values that are oriented towards the future like thriftiness and

persistence; they also value respect for tradition and fulfilling social obligations

(Hofstede, 1993).

WORK VALUES

Values are regarded as the essential concepts that are possessed by individuals and a

society. Schwartz (1999) defined value as a desirable concept that guides the way people

select their actions, evaluate people and events, and explains their actions and

evaluations. Super and Hoppock (1950) investigated job satisfaction and found that

aspects of work such as wages, hours worked, opportunities to help others, and

independence were related to an employee's level of satisfaction with his/her job.

Super and Super (1957) observed that individuals share similar values that are work

related and termed these work values. In later research, Super (1970) described work

values as the qualities that are desired by an individual in their activities, life situations,

and acquisitions. Work values have been more narrowly defined as the end states people

desire and feel they ought to be able to realize through working (Nord, Brief, Atieh, &Doherty, 1988). Zytowski (1970) reasoned that work values mediate an individual's

preferences and work goals (e.g., when a promotion is offered, the degree of preference

varies according to personal values). Other researchers have found that work values are

involved in an individual's career selection, career planning, degree of contribution, job

performance, and work intent (Locke, 1969; Super, 1970).

King and Bond (1985) found that Confucianism encourages the pursuit of long-term

benefits (perseverance) as a trade-off for suffering short-term loss (thriftiness).

Adherence to this philosophy stresses the value of diligence and working hard to achieve

long-term goals which can be related to the work values of self-enhancement, rewards,stability, and personal interest. Jaw, Ling, Wang, and Chang (2006) provided a model for

Confucian dynamism that further reinforced the emphasis placed on self-enhancement in

that, in their model, Chinese work values are directly related to self-enhancement and

openness to change. For MNCs to be successful in China, they must integrate Confucian

dynamism into their management practices in order to motivate Chinese workers to strive

for the self-achievement and openness to change that is valued in Chinese culture. Jaw



and colleagues suggest that Western cultural experience can build on the main cultural

value of Chinese Confucian dynamism.

PAY SATISFACTION

Pay satisfaction can have a positive or negative impact on an individual's feelings abouthis/her pay level. Porter and Lawler (1968) defined pay satisfaction as the feelings or

affective perceptions that an individual experiences in relation to the existing pay system.

Pay satisfaction also operates as an expression of comparison between what exists and

what is expected (Locke, 1969; Porter, 1961). Graham and Messner (1998) described pay

satisfaction as a successive reaction that demonstrates negative and positive values. It is

these negative and positive values that indicate how an individual feels about their work

(Miceli & Lane, 1991).

The best known models of pay satisfaction are the equity and discrepancy theories. Both

theories are built on the hypothesis that satisfaction is a direct result of the psychological

state that an employee has when the pay he/she is receiving with the pay he/she expects

to receive. However, it is believed that the expectancy theory is more closely linked to

pay satisfaction. Porter and Lawler (1968) described how an individual bases his/her

personal expectations and perceptions on returns, which assist him/her in deciding how

much effort he/she will expend to perform a particular task. The model these authors

proposed has three main elements; effort, expected rewards, and performance. Negative

consequences of pay satisfaction that have been reported are unwanted behaviors

including absenteeism, lower performance levels, lower turnover commitment, and a

willingness to strike (Orpen & Bonnici, 1987). Chiu and Kosinski (1999) found that people who have a positive outlook on life tend to experience greater job satisfaction.

Organizational Commitment

There are a number of definitions of organizational commitment. Sheldon (1971) defined

organizational commitment as an attitude or orientation toward the organization, which

links or attaches the identity of the person to the organization. Weiner (1982) referred to

organizational commitment as the internalized pressures for acting in a way that meets

the organization's goals and interests. Organizational commitment has also been

described as the bond between an employee and the organization (Mathieu & Zajac,1990). A central theme in the numerous definitions and descriptions is the psychological

attachment that an individual develops with an organization.

Organizational commitment has been an active area of research and most of the findings

have provided insight into the attitudes and behaviors that are displayed at work. Some

researchers have found that organizational commitment is seen in employee behaviors



such as absenteeism, job searching, prosocial behavior, and turnover or turnover intention

(Gellatly, 1995; Morrow, 1993; O'Reilly & Chatman, 1986; Somers, 1993; Steers, 1977);

attitudinal constructs such as high motivation, job involvement, job performance, and job

satisfaction (Farrell & Rusbult, 1981; Gregson, 1992); characteristics of the job such as

flexibility, responsibility, and role conflict; and other variables including age, gender, and

length of tenure (Bateman & Strasser, 1984; Mathieu & Zajac, 1990).

TURNOVER INTENTION

The time always comes when an individual considers the possibility of terminating his or

her employment with an organization (Mobley, 1982). Turnover intention has been

defined as a conscious psychological willingness to leave an organization (Tett & Meyer,

1993). It also represents thoughts of quitting a job or searching for new employment

opportunities. Price and Mueller (1981) described how there are diverse factors that

affect turnover, which can make it difficult to predict turnover behavior accurately.

However, turnover intention (or the intention to leave) has been identified as the best

predictor of turnover because researchers have demonstrated that intention to leave has

been consistently correlated with turnover (Bedeian, Kemery, & Pizzolatto, 1991;

Mobley, Homer & Hollingsworth, 1978; Newman, 1974). Compared to job search

behavior, turnover intention has been found to be a more consistent antecedent

(Kopelman, Rovenpor, & Millsap, 1992; Vandenberg, Self, & Seo, 1994). Fishbein and

Ajzen (1975) identified the best predictor of an individual's behavior as the strength of

his/her intention to perform that behavior.

WORK VALUES AND ORGANIZATIONAL COMMITMENT

Herzberg (1966) defined organizational commitment as an exchange process of an

employee's values and the work rewards that are provided by an organization. Some

researchers view work values as a specific and important variable that helps to explain

organizational commitment (Kidron, 1978; Putti, Aryee, & Liang, 1989). In other studies

researchers have classified work values into extrinsic and intrinsic dimensions as a

method of investigating organizational commitment. Intrinsic work values have been

found to influence organizational commitment more significantly when compared to

extrinsic work values (Mottaz, 1986; Putti et al., 1989). This finding formed the basis of

our first hypothesis:

Hypothesis 1: Work values will affect both normative and continuance organizational

commitment.

WORK VALUES, PAY SATISFACTION, AND TURNOVER INTENTION



Schwartz (1999) suggested that the pursuit of intrinsic work values (e.g., personal growth

or opportunities for creativity) was likely to be seen as desirable and justified when the

value of autonomy is emphasized. Hofstede (1980b) suggested that in patriarchal

societies motivation may be based more on the acquisition of money and possessions

than on quality of life because money is associated with security and stability. Jaw and

colleagues (2006) believed that, in this respect, Western culture has had an effect on

Chinese Confucian dynamism. A possible explanation for this is that people in

management positions in Chinese industries/businesses who have been exposed to

Western cultures are thought to work more diligently so they can obtain more rewards

that are related to performance, and this is a major feature of management practices in the

Western work environment (Jaw et al., 2006). These findings formed the basis of the

following hypotheses:

Hypothesis 2: Work values will affect an individual's intention to leave.

Hypothesis 3: An individual's level of pay satisfaction will have a mediating effect on the

relationship between work values and intention to leave.

PAY SATISFACTION, ORGANIZATIONAL COMMITMENT, AND TURNOVER

INTENTION

Williams and Hazer (1986) suggested that rather than simply categorizing the

determinants of turnover, researchers should try to identify the sequence of emotional

responses in the turnover process. Job attitude and psychological factors have been found

to affect turnover intention. Researchers have investigated the relationships among jobsatisfaction (JS), organizational commitment (OC), pay satisfaction, and turnover

intention (TI) with several different models being developed from the analyses.

The first model was based on the proposition that organizational commitment acts as a

mediator of job satisfaction and turnover intention (i.e., JS>OC>TI). Porter et al. (1974)

found that job satisfaction contributed to organizational commitment based on the

specificity and stability argument. Steers (1977) found that there was an exchange

between the two components in that employees elevate their level of commitment as their

expectations are satisfied.

In the second model, organizational commitment was presented as the cause of job

satisfaction (i.e., OC>JS>TI). Bateman and Strasser (1984) described how commitment

initiates a rationalizing process through which individuals make sense of their current

situation by developing attitudes that are consistent with their commitment.



In the third model a correlation was found between organizational commitment and job

satisfaction; with both components interacting and influencing turnover through turnover

intention. Williams and Hazer (1986) found that job satisfaction and organizational

commitment acted as a deterrent to turnover intention, and reduced turnover was the

consequence. Farkas and Tetrick (1989) reported that job satisfaction and organizational

commitment appear to have a strong predictive value for turnover intention and found

that the two variables were related. Elangovan (2001) found that there had been an

inadequate understanding of the roles played by satisfaction and commitment in turnover

intentions and that there was some confusion regarding the relationship between pay

satisfaction and commitment.

In this study we sought to clarify these differing views and build an explicit model to

illustrate the causal relationships among job satisfaction, commitment, and intention to

quit one's job.

Mobley (1977) identified satisfaction as the obvious antecedent to behavior intentions.

Bretz, Boudreau, and Judge (1994) found in their study of employed managers that

dissatisfaction was caused by the diverse aspects of the job and organization. In their

study Campbell and Campbell (1997) examined the relationship between job satisfaction

and turnover intention in Singapore and found that Singaporeans regard pay as the most

important factor that would cause them to leave an organization. Other researchers have

provided evidence that pay satisfaction is negatively associated with turnover intention

(Bluedorn, 1982; Chiu & Kosinski, 1999; Spector, 1997). From these various findings we

formed the following hypothesis:

Hypothesis 4: The greater an individual's pay satisfaction the lower will be his/ her

intention to leave.

In previous studies, it has been found that the relationship between pay satisfaction (job

satisfaction) and organizational commitment is variable and at times results are

contradictory. Bateman and Strasser (1984) determined that organizational commitment

was the initial affective factor and was an antecedent to job satisfaction. Porter et al.

(1974) held the opposite view, arguing that satisfaction represents one specific

component of organizational commitment. Williams and Hazer (1986) were of the view

that satisfaction does causally affect organizational commitment, while Steers (1977)found that as an employee's needs are satisfied by the organization, they develop more

commitment to the organization. Chen and Francesco (1995) adopted the view that pay

satisfaction has a causal influence on organizational commitment. Based on these

divergent views, we formed the following hypothesis:



Hypothesis 5: The greater an individual's pay satisfaction the stronger will be his/her

organizational commitment.

Organizational commitment has been described as an antecedent of turnover intention

(Poznanski & Bline, 1997). Other researchers have demonstrated the importance of

organizational commitment in explaining turnover intention (Bluedorn, 1982; Mitchel,

1981; Porter, Steers, Mowday, & Boulian, 1974). Organizational commitment,

procedural justice, and job-changing attitudes have been identified as the three main

factors that are associated with turnover intention. Affective commitment has been found

to be negatively related to turnover intention (Allen & Meyer, 1996; Chen & Francesco,

2000; Dunham, Grube, & Castaneda, 1994). Individuals with high affective commitment

levels may choose to stay with an organization because they have a strong psychological

belief in the organization and its mission. Organizational commitment has also been

recognized as having a significantly negative association with turnover intention. The

hypothesis we developed to test this was:

Hypothesis 6: The stronger an individual's organizational commitment the lower will be

his/her intention to leave.

METHOD

RESEARCH FRAMEWORK

The aim in this study was to ascertain the effects of an individual's work values on pay

satisfaction and organizational commitment and also to establish whether or not this set

of values has negative associations with intention to leave. In the study, work values and

pay satisfaction were taken as the determinants of organizational commitment and

turnover intention. In the light of this view there was a need to ascertain whether or not

there were any mediating effects that might occur between pay satisfaction, turnover

intention, and work values. The semiconductor business was chosen as the subject of the

study because it is a recently developed industry, because the sector has an engineering

orientation. Figure 1. Research framework.

SAMPLING PROCEDURE

A total of 260 questionnaires were distributed randomly to employees of three selected

foreign-funded MNCs in the semiconductor business operating in the area around

Shanghai, China in May of 2005. Respondents were limited to citizens of China;

expatriates from other countries (e.g., Taiwan, America) were not invited to participate in

the survey. All participants were assured of anonymity. A total of 125 questionnaires

were returned and 112 were determined to be valid, giving a response rate of 43%.



MEASURES

The questionnaire consisted of 20 work value items, 16 pay satisfaction items, 20

organizational commitment items, and six turnover intention items. The questionnaires

were written in English initially and then translated into Chinese by the authors, using

back translation to ensure accuracy of the translation. The measuring scales were selected

as described below.

Work Values Three dimensions of work values were defined in this study: people-related,

job outcome, and the job itself. People-related factors included relationships with

colleagues and supervisors, personal growth, recognition, the use of expertise,

knowledge, and competence. Job outcome represented the desire for respect, economic

rewards, secure and stable lifestyle, benefits, prestige, and social status. Finally, the job

itself focused on working conditions, hours worked, degree of autonomy, ideal

pursuance, and meaningfulness of job content. The 20 items that were used for

measurement of work values were taken from the Work Values Scale (Elizur, Borg,

Hunt, & Beck, 1991). Participants rated their opinions on a 5-point Likert scale ranging

from 1 = strongly disagree to 5 = strongly agree.

Pay Satisfaction Heneman and Schwab (1985) categorized pay into four dimensions:

level, benefits, pay increases, and structure. In the current study these dimensions were

condensed down to 2 factors--financial satisfaction and structural satisfaction. Financial

satisfaction incorporates the first three dimensions of Heneman and Schwab's model and

structural satisfaction remained the same as the original factor. Pay satisfaction was

measured using a 16-item scale similar to the items used in Heneman and Schwab's PaySatisfaction Questionnaire (PSQ; 1985). Responses followed a 5-point Likert scale

ranging from 1 = very dissatisfied to 5 = very satisfied. The questions in the PSQ were

used to explore the two dimensions as follows: financial satisfaction (questions 1, 2, 3, 4,

5, 6, 9, 12, 13, and 14) and structural satisfaction (questions 7, 8, 10, 11, 15, and 16).

Organizational Commitment Meyer and Allen (1991) developed a 3-component

conceptualization that we adapted to measure organizational commitment in this study.

The questionnaire contained 18 items classified as affective commitment (1-6),

continuance commitment (7-12), and normative commitment (13-18). In our study we

used only Questions 8-17, omitting the dimension of affective commitment. Participantsrated their responses using a 5-point Likert scale ranging from 1 = strongly disagree to 5

= strongly agree. Turnover Intention In order to investigate how often respondents

seriously considered quitting their job, whether or not they wanted to quit, and/or were

actually planning to quit, six items were extracted from a scale developed by Konovsky

and Cropanzano (1991). Responses followed a 5-point Likert scale ranging from 1 =

strongly disagree to 5 = strongly agree.



RESULTS

FACTOR ANALYSIS

Exploratory factor analysis was used in this study in order to construct condensed

dimensions. There were diverse variables in the instruments and factor analysis assistedwith extracting the common factor of the specific instrument and established a more

understandable factor structure. Factor analysis results provided us with the rearranged

dimensions of each variable. As already described above, the work value dimensions

were reclassified to people-related, job outcome, and the job itself instead of intrinsic,

extrinsic, and concomitant. Four pay satisfaction dimensions were combined into

financial and structural aspects. As for the organizational commitment dimensions, the

affective dimension was not included in this study because normative and continuance

aspects were the targets. We employed the refined factors of each variable, which were

more suitable for the respondents; the statistical results are shown as Appendices 1, 2,

and 3 at the end of this paper.

DESCRIPTIVE ANALYSIS

Table 1 shows the demographic distribution of the participants.

CORRELATIONS RESULTS

We performed correlations to test the six hypotheses. A Pearson's correlation illustrated

that work values, pay satisfaction, and organizational commitment were positively

correlated and that these three variables were negatively associated with turnover

intention.

DEMOGRAPHICS

Each demographic factor was loaded separately into the SPSS program as a dependent

variable and all the other factors were loaded as independent variables. All the variables

and factors were confirmed to be homogeneous (p > 0.05). There was no significant

difference caused by age, gender, or marital status. There were some differences that we

found interesting in the t test and one-way ANOVA statistical results. First, it was found

that education had a significant impact on the dimension of the job itself in work values.

Employees with higher education backgrounds were more concerned about job aspects,

such as job autonomy, job content, and having a meaningful job, than were those who

had less education.

Different degrees of normative commitment and turnover intention were found in each

group according to the number of years they had been working for the company.



Employees who had been with a company for 5 or more years had a higher normative

commitment than those who had been with the company for fewer than 5 years. The

group that had been employed for longer tended to feel more obligated towards the

company and possessed a higher level of commitment. Additionally, the group who had

been employed for fewer than 5 years was found to have a lower satisfaction with pay

and less commitment, but they also demonstrated a lower level of intention to leave. One

possible explanation for this is that staff members who have been employed for a shorter

time had less work experience and, possibly, less competence; so they were less sure of

their ability to find a new and better job.

A high level of pay satisfaction (both financial and structural) and of organizational

commitment was found in the management group, which suggested two things. First,

because management-level employees are well paid and receive a better benefit package

in comparison to the nonmanagement group and because the potential cost of seeking a

new job was higher, so management-level employees tended not to leave a company anddemonstrated a higher organizational commitment as compared to the nonmanagement

group.

REGRESSION ANALYSIS

WORK VALUES AND ORGANIZATIONAL COMMITMENT REGRESSION

The people-related work values dimension was found to have a positive and significant

influence on normative commitment ([beta] = 0.339, t = 3.025). The job outcome

dimension was also found to have a positive influence on continuous commitment ([beta]= 0.220, t = 2.134). These results suggested that individuals place a high degree of

importance on their relationships with colleagues and supervisors.

WORK VALUES, PAY SATISFACTION, AND TURNOVER INTENTION AND THE

MEDIATOR EFFECT

Table 4 confirmed that work values and pay satisfaction (financial and structural) were

significantly influenced by turnover intention (p < 0.001), which indicated that pay

satisfaction was able to explain 35.5% of turnover intention. Financial satisfaction was

also found to have a highly negative ability in predicting turnover intention ([beta] =-0.515, p < 0.001), which indicated that an individual that has financial satisfaction is less

likely to leave an organization

PAY SATISFACTION, ORGANIZATIONAL COMMITMENT, AND TURNOVER

INTENTION



Table 6 revealed a highly significant effect of pay satisfaction and turnover intention on

organizational commitment ([beta] = 0.543, p < 0.001), which led us to assume that

employees who expressed a high level of financial pay satisfaction possessed a higher

level of organizational commitment, for both continuous commitment ([beta] = 0.359, p <

0.01) and normative commitment ([beta] = 0.468, p < 0.001). The research results

supported our final hypothesis and were consistent with the results of previous research

(Steers, 1977).

DISCUSSION

In summary, work values, pay satisfaction, and organizational commitment were all

found to have a significant influence in predicting turnover intention. This supported our

hypotheses. All three variables were able to explain 56.7% of turnover intention.

DIFFERENT DIMENSIONS OF WORK VALUES AFFECT AN INDIVIDUAL'S

INTENTION TO LEAVE

Work values were confirmed to have a high influence and a negative coefficiency

variance on turnover intention. The people-related dimension of work values was found

to have a significant effect on turnover intention, which implied that, in terms of intention

to leave their job, among the three dimensions of work values, the respondents were more

influenced by people-related issues like personal growth and their relationships with their

supervisor and colleagues. This may be a result of emphasis that the Chinese culture

places on interpersonal relationships, especially when compared to Western cultures (see

e.g., Chou, Cheng, Huang, & Cheng, 2006).

AN INDIVIDUAL'S LEVEL OF PAY SATISFACTION HAS MEDIATING EFFECTS

ON THE RELATIONSHIPS BETWEEN WORK VALUES AND INTENTION TO

LEAVE

Pay satisfaction was found to have a significant influence on turnover intention. So it was

not surprising to find that employees who displayed a high level of pay satisfaction had

less intention to leave. When financial pay satisfaction was fulfilled, the intention to

leave reduced dramatically. By adding pay satisfaction into the equation of work values

and turnover intention, the new equation more strongly predicted turnover intention (R2increased from 0.172 to 0.411).

In the new environment of social-capitalism in China, younger generations of Chinese

workers have become more individualistic and materialistic. They tend to seek more

personal growth and recognition tied to financial rewards. If they do not receive the

expected financial rewards they are more likely to leave an organization than were their



forbears. We believe that this situation explains the research results of pay satisfaction

mediating the relationship between work values and turnover intention.

AN INDIVIDUAL'S LEVEL OF PAY SATISFACTION HAS A POSITIVE

RELATIONSHIP WITH ORGANIZATIONAL COMMITMENT AND ITS

DIMENSIONS

Pay satisfaction and organizational commitment proved to be positively correlated in that

pay satisfaction had a significant influence on organizational commitment. Pay

satisfaction accounted for 38% of organizational commitment. When broken down into

each dimension, financial pay satisfaction was found to have a highly significant

influence and to be strongly predictive of organizational commitment. Implications of

these results are, firstly, that compared to pay structure, the actual financial payment was

of greater concern to the employee than it was to the managers. Second, management

could assess the degree of an individual's organizational commitment by investigating the

employee's level of pay satisfaction.

AN INDIVIDUAL'S ORGANIZATIONAL COMMITMENT IS NEGATIVELY

RELATED TO TURNOVER INTENTION

In the past, researchers have confirmed the relationship between organizational

commitment and turnover intention (Mitchel, 1981; Mobley, 1977). In this study we

found that organizational commitment was negatively correlated with turnover intention,

and this result has significance for the ability to predict intention to leave. Employees

attach themselves to a company by aligning their personal interests and goals with thecompany. When an employee is able to have more input and spontaneously puts more

effort and time into his/her work, he or she tends not to be as likely to leave the company.

CONCLUSION AND SUGGESTIONS

In this study, work values, pay satisfaction, and organizational commitment were found

jointly and individually to have a significant influence on turnover intention. It was found

that the way in which people relate to others plays a significant role in Chinese

companies. We found that when a company's management supports its employees' value

systems, the employees tended to have a higher commitment to the organization.

In the literature review, work values were shown by many researchers to dominate an

employee's work intent, job performance, and contribution. Individuals place different

values on the same things and so with a better knowledge of the employee's value system

the employer should be able to increase the employee's organizational commitment.

Respondents in this study valued interpersonal relationships and individual growth,



which provides management with an opportunity to create an atmosphere that is more

family-like and caring to take advantage of this focus.

The results of this study may provide some guidelines for managers in understanding the

work vales of the younger generation of Chinese employees, and this could lead to

implementation of more effective policies for improving employee retention. Some

companies in China have not tried to find ways to reduce turnover because the labor

supply has been plentiful. This situation has changed and it has become increasingly

difficult for Chinese firms to recruit new employees. Our results confirming that pay

satisfaction and organizational commitment were strong predictors of turnover intention,

indicate that companies should conduct periodic surveys of employees on their pay

satisfaction and organizational commitment. This could lead to a better understanding of

employee reactions and feelings about, and opinions of, the company's current operations

or policies; it could also help management to take precautions against unexpected

developments.

Reducing the turnover rate has always been an important area for human resource

managers to focus on. This study has provided three directions for positive development;

understanding the employee's work values, evaluating pay satisfaction, and measuring

organizational commitment. Human resource managers should combine these objectives

into their functions of recruitment, education, and evaluation.

The study was not without limitations. There are certain factors that should be kept in

mind when interpreting the results. First, the target of the investigation was a single

industry. The respondents possessed a high level of education and other specializations,so they are not necessarily representative of the general workforce in China (e.g., people

working in the service and manufacturing industries might possess different work values

relating to organizational commitment and turnover intention). Future researchers should

test the reliability of the findings with other sectors of business and industry, as well as

taking demographics into account as control variables in the analysis. Additionally, there

is a possibility that the structure of this research might have been too simplistic, and the

survey may also suffer from common method variance.

Attempts to explain an increase or decrease in the level of organizational commitment

and turnover intention can involve many factors. Work values and pay satisfaction are just two factors that were used in this study; however, there are many other factors that

could be considered or examined. This study might also have been limited by the

quantification methods that were used. Future researchers could include qualitative

measures for obtaining additional information from the participants. Generalizing the

opinion of individuals could provide a more complete picture of the relationships

between organizational commitment and turnover intention. Additionally, the



questionnaires were distributed in the Greater Shanghai area; hence, their representation

might not be generalizable to other areas in China.

APPENDIX 1

FACTOR ANALYSIS OF WORK VALUES

Item Factor loadings (rotated) Factor 1 Factor 2 Factor 3

1. Work involves loyalty

to my firm. 0.602 -0.112 0.060

2. Work provides me with

personal growth and

self-improvement. 0.662 0.097 0.312

3. Work requires my expertise,

knowledge, and ability 0.623 0.131 0.321

4. Work involves serving and

contributing to society. 0.509 0.139 0.393

9. Work involves maintaining goodrelationships with colleagues. 0.574 0.111 0.043

10. I receive fair treatment

from my superior at work. 0.684 0.065 0.126

18. I obtain good evaluations about

my job performance. 0.596 0.350 0.317

13. My position earns me respect. 0.066 0.571 0.380

14. My main reason for working at

my job is the salary. 0.061 0.726 0.180

15. Work gives me security and

stability in life. 0.072 0.601 -0.047

16. My job provides me with

benefits. 0.237 0.650 0.035

20. Work gives me popularity and

increases my social status. -0.072 0.720 0.249

5. My job allows for autonomy

and independence. 0.185 0.123 0.790

6. My job is meaningful. 0.304 0.079 0.725

7. My job increases my

self-actualization. 0.272 0.327 0.603

Eigenvalue (rotated) 2.875 2.483 2.233

Variance explained (%) 19.166 16.556 14.885

Accumulated variance 19.166 35.722 50.607

Explained (%) 0.8611

Cronbach's alpha value for

each dimension 0.8385 0.7991 0.8065

Notes: Factor 1: people-related; Factor 2: job outcome;

Factor 3: the job itself.



APPENDIX 2

FACTOR ANALYSIS--PAY SATISFACTION

Item Factor loadings (rotated) Factor 1 Factor 2

1. My salary is high. 0.878 0.107

2. My employer offers worthwhile 0.783 0.188

benefits.

3. I am satisfied with my most 0.626 0.353

recent pay raise.

4. My boss was fair in my recent 0.506 0.335

pay raise evaluation.

5. I am satisfied with the benefits 0.868 0.229

offered by my employer

6. My previous pay rises were 0.606 0.364

acceptable.

9. My salary matches my abilities. 0.683 0.440

12. I am satisfied with my current 0.775 0.309

salary.

13. I am satisfied with the current 0.780 0.327

benefits provided by my job.

14. I agree with the criteria 0.599 0.480

used for assessing who is due

for a pay raise.

8. I am satisfied with the pay 0.510 0.527

information provided by my employer.

10. I agree with the pay rates for 0.514 0.538

other positions at my work.11. The pay policy is consistent at work. 0.284 0.725

15. I agree with the pay differences 0.425 0.549

across various positions at work.

16. I agree with the payment methods 0.022 0.543

offered.

Eigenvalue (rotated) 5.974 2.784

% of variance explained 39.825 18.562

Cumulative % of variance explained 39.825 58.386

Cronbach's alpha value 0.9372

Cronbach's alpha value for each dimension 0.9364 0.7877

Notes: Factor 1: financial pay satisfaction;

Factor 2: structural pay satisfaction.

APPENDIX 3

FACTOR ANALYSIS--ORGANIZATIONAL COMMITMENT

Item Factor loadings (rotated) Factor 1 Factor 2



8. I would find it hard to

leave my current job. 0.739 0.090

9. My life will be negatively

impacted if I leave my job. 0.710 -0.008

10. I will have a limited selection

of jobs if I decide to leave

my current employment. 0.879 -0.013

12. It will be hard to find a job

if I leave my current employment. 0.639 0.173

14. Due to the current opportunities

my job provides, I would choose

not to leave. 0.218 0.789

15. I would feel disloyal if I left. 0.205 0.633

16. The company has earned my loyalty. 0.310 0.531

17. I will not leave because I feel

obligated to stay. -0.093 0.550

Eigenvalue (rotated) 2.441 1.967

% of variance explained 27.126 21.859

Cumulative % of variance explained 27.126 48.985

Cronbach's alpha value 0.7611

Cronbach's alpha value for

each dimension 0.828 0.757

Notes: Factor 1: continuance commitment;

Factor 2: normative commitment.

TABLE 1

DESCRIPTIVE ANALYSIS

n %

Gender Male 73 65.2

Female 39 34.8

Age 20-25 55 49.1

26-30 43 38.4

31-35 12 10.7

36-40 2 1.8

Education Senior high school 15 13.4

College 88 78.6

Master's degree 7 6.3

Doctorate 2 1.8

Marital Status Married 21 18.8

Single 91 81.2

Tenure Less than 1 year 57 50.9

1-2 years 38 33.9

3-5 years 13 11.6

More than 5 years 4 3.6



Position Nonmanagement 102 91

Management 10 9

Note: N = 112

TABLE 2

CORRELATIONS ANALYSIS

Correlations Work Values

M SD People- Job Job

related outcome itself

Work values

People-related 4.143 0.514 1.000

Job outcome 3.500 0.668 0.294 ** 1.000

Job itself 4.030 0.741 0.557 ** 0.381 **

Pay Satisfaction

Financial 2.933 0.695 0.273 ** 0.066 0.116

Structural 3.231 0.598 0.264 ** 0.196 * 0.153 **

Organizational

Commitment

Continuous

commitment 2.410 0.810 -0.141 0.147 -0.102

Normative

commitment 3.102 0.625 0.307 ** 0.127 0.125

Turnover Intention 2.609 0.694 -0.371 ** -0.143 -0.172 *

Pay Satisfaction Organizational

Commitment

Financial Structural Continuance Normative

Work values

People-related

Job outcome

Job itself 1.000

Pay Satisfaction

Financial 1.000

Structural 0.713 ** 1.000

Organizational

Commitment

Continuous

commitment 0.346 ** 0.227 ** 1.000

Normative

commitment 0.520 ** 0.398 ** 0.201 * 1.000

Turnover Intention -0.551 ** -0.436 ** -0.255 ** -0.623**

Notes: * Correlation is significant at p < 0.05 (1-tailed);

** Correlation is significant at p < 0.01 (1-tailed).



TABLE 3

ONE-WAY ANOVA ANALYSIS

Dependent

Job Normative Turnover

itself commitment intention

Education Senior high

school M 3.489

Bachelor's

degree 4.112

Master's

degree 4.190

Doctoral

degree 4.000

F test 3.329 *

Tenure < 1 year M 3.133 2.465

1-2 years 2.916 2.825

3-5 years 3.354 2.718

> 5 years 3.600 2.250

F test 2.859 * 2.697 *

Position Nonmanagement M

Management

t test

Financial Structure

pay satis- pay satis-

faction faction

Education Senior high school M

Bachelor's degree

Master's degree

Doctoral degree

F test

Tenure < 1 year M

1-2 years

3-5 years

> 5 years

F test

Position Nonmanagement M 2.873 3.193

Management 3.530 3.620

t test -2.947 * -2.197 *

Continuous

commitment

Education Senior high school M

Bachelor's degree



Master's degree

Doctoral degree

F test

Tenure < 1 year M

1-2 years

3-5 years

> 5 years

F test

Position Nonmanagement M 2.329

Management 3.225

t test -3.501 *

Note: * p < 0.05

TABLE 4

MULTIPLE REGRESSION ANALYSIS:

WORK VALUES DIMENSIONS TO PAY SATISFACTION

Financial pay Structural pay

satisfaction satisfaction

Work Standardized t values Standardized t values

values [beta] [beta]

People-related 0.352 2.872 ** 0.285 2.272 *

Job outcome -0.043 -0.417 0.129 1.234

Job itself -0.113 -0.886 -0.080 -0.613

Pay satisfaction

Work Standardized t values

values [beta]

People-related 0.346 2.799 **

Job outcome 0.040 0.385

Job itself -0.104 -0.814

Notes: * p < 0.05, ** p < 0.01, *** p < 0.001

TABLE 5

MULTIPLE REGRESSION ANALYSIS: PAY SATISFACTION DIMENSIONS

TO TURNOVER INTENTION

Turnover intention

Standardized t values Significance

Coefficients

[beta]



Financial pay

satisfaction -0.515*** -4.315 0.000

Structural pay

satisfaction -0.097 -0.831 0.408

F = 6.88, p < 0.001

R 0.596

[R.sup.2] 0.355

Method entered

* p < 0.05, ** p < 0.01, *** p < 0.00

TABLE 6

MULTIPLE REGRESSION ANALYSIS: PAY SATISFACTION AND

ORGANIZATIONAL COMMITMENT

Continuance Normative

Commitment Commitment

Standardized t values Standardized t values

[beta] [beta]

Financial pay

satisfaction 0.359 2.761 ** 0.468 3.751 ***

Structural pay

satisfaction -0.076 -0.595 0.068 0.557

OrganizationalCommitment

Standardized t values

[beta]

Financial pay

satisfaction 0.543 4.619 ***

Structural pay

satisfaction -0.020 -0.178

Method entered

* p < 0.05, ** p <0.01, *** p < 0.001

TABLE 7

HIERARCHICAL REGRESSION: WORK VALUES, PAY SATISFACTION,

ORGANIZATIONAL COMMITMENT, AND TURNOVER INTENTION

Turnover Intention



Model 1 Model 2 Model 3

[beta]

Constant 4.722 5.641 6.315

Work Values

people-related -0.430 ** -0.180 -0.124

job outcome -0.058 -0.068 -0.008

job itself -0.029 -0.089 -0.126

Pay Satisfaction

Financial -0.487 ** -0.211

Structural -0.051 -0.054

Organizational

Commitment

Continuance Commitment -0.126

Normative Commitment -0.494 **

F 2.199 ** 5.892 ** 9.177 **

R 0.172 0.411 0.567

[R.sup.2] 0 0.239 0.156

* p < 0.05, ** p < 0.01, *** p < 0.001

chinese employees

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