Pay Dissatisfaction and Intention to Leave

• DOI: http://doi.org/10.1002/nml.21108
• Author: Elizabeth Frankish,Gerrit J. M. Treuren
• Date: 01 September 2014
• Published date: 01 September 2014

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N M  L, vol. 25, no. 1, Fall 2014 © 2014 Wiley Periodicals, Inc.

Published online in Wiley Online Library (wileyonlinelibrary.com) DOI: 10.1002/nml.21108

Journal sponsored by the Jack, Joseph and Morton Mandel School of Applied Social Sciences, Case Western Reserve University.

Correspondence to: Gerrit J. M. Treuren, Centre for HRM, School of Management, University of South Australia

Business School, University of South Australia, GPO Box 2471, Adelaide SA 5000, Australia.

E-mail: gerry.treuren@unisa.edu.au.

Research Articles

Pay Dissatisfaction and Intention

to Leave

THE MODERATING ROLE OF PERSONAL CARE WORKER

CLIENT EMBEDDEDNESS

Gerrit J. M. Treuren,1 Elizabeth Frankish2

1University of South Australia Business School, 2The Paraplegic and Quadriplegic

Association of SA, Inc.

This article examines the power of a particular type of employee attachment—client

embeddedness—in buffering the adverse effect of pay dissatisfaction on employee intention

to leave. Based on a sample of 153 personal care workers employed by a disability service

organization, this article finds that client embeddedness—the attachment that employees

can experience as a result of interactions with clients or customers—dampens the adverse

effect of pay dissatisfaction on employee intention to leave. This finding has implications

for the development of appropriate recruitment and retention practices in not-for-profit

organizations.

Keywords: pay satisfaction, intention to leave, turnover, retention, HR practices, job

embeddedness theory

AS THEY DO IN OTHER COUNTRIES (Calabrese 2013), Australian not-for-profi t organizations

have limited resources and fi nancial reserves.  e typical not-for-profi t organization in the

Australian social and community welfare sector lacks the fi nancial capacity to provide com-

petitive pay and employment conditions to their personal care workforce (Briggs, Meagher,

and Healy 2007; Charlesworth and Marshall 2011).1 As a result, employees who provide

direct service personal care work in the sector are usually poorly paid, leading to diffi culties

in recruitment and retention of suitable employees at a time of growing demand ( Austra lian

Council of Social Service [ACOSS] 2011; Australian Services Union [ASU] 2007; Job Out-

look n.d.; King 2007; Martin and Moskos 2005).  e adverse social implications of low

6 TREUREN, FRANKISH

Nonprofi t Management & Leadership DOI: 10.1002/nml

pay in this sector have recently been acknowledged by the Prime Minister, the Productivity

Commission and Fair Work Australia, the Australian agency responsible for fixing mini-

mum wages across the workforce (Fair Work Australia 2011, 2012; Gillard 2011, 2012;

Productivity Commission 2008, 2010).

 is article proposes a new construct—client embeddedness—that might assist not-for-profi t

sector employers in dealing with pay dissatisfaction by developing more eff ective recruitment and

retention strategies. Client embeddedness is the attachment an employee has to his or her clients.

 is construct is similar to that of “job embeddedness” except that the referent is the benefi ciary

of one’s work eff ort: students for a teacher, patients for a nurse or physiotherapist, clients for a

hairdresser or attorney, parishioners for a cleric or constituents for a politician—rather than the

“job” or “organization” as in job embeddedness theory (JET; Mitchell et al. 2001).

We propose that an employee’s client embeddedness may have an impact on the employee’s

thoughts of leaving and may act to bind an employee to a job or an organization.  is article

examines whether client embeddedness exists and infl uences an employee’s response to pay

dissatisfaction and intention to leave, in a sample (n = 153) of personal care employees in

a disability service organization providing home-based support services. If this eff ect exists,

then an organization can maximize the positive benefi ts of this form of embeddedness for cli-

ents, employees, and the organization by adopting appropriate people management practices

designed to cultivate client embeddedness within the workforce. In keeping with the adaptive

strategies employed by not-for-profi t organizations (Mosley, Maronick, and Katz 2012) and

the need for context-appropriate people management practices (Beck, Lengnick-Hall, and

Lengnick-Hall 2008), recruitment practices could be redesigned to emphasize the nature of

the work and aim to attract potential employees by the nature of the work (Lievens 2007).

Retention practices can be developed to recognize and cultivate the employee–client relation-

ship (Becker, Antuar, and Everett 2011; Van Hoye and Saks 2011), as well as to better engage

employees in the organization (Swanson 2013).

In addition to the implications for professional practice outlined here, this article makes

several contributions to the theoretical literature. By developing and testing the concept of

“client embeddedness,” this article proposes a new explanation of why people may remain

in low-paid roles when better job alternatives exist. Further, this article proposes and tests an

additional form of embeddedness, adding to the ongoing debate in the JET literature over

the scope of “employee embeddedness” (Clinton, Knight, and Guest 2012; Holtom et al.

2008; Zhang, Fried, and Griff eth 2012).

Pay Satisfaction and Employee Intention to Leave

 e literature has demonstrated that pay satisfaction has a negative association with employee

intention to leave (DeConinck and Stilwell 2004; Shields et al. 2012; Vandenberghe and

Tremblay 2008). Cotton and Tuttle’s (1986) meta-analysis found that pay and pay satisfac-

tion were negatively associated with turnover in twenty-nine out of thirty-two studies. Grif-

feth, Hom, and Gaertner’s (2000) meta-analysis suggested that pay satisfaction has a −.08

correlation with actual leaving.

 e literature has emphasized the importance of nonmaterial reasons that people work in the

not-for-profi t sector. Brown and Yoshioka (2003), for example, highlighted the role of organ-

izational mission in the recruitment phase, although poor pay remains an issue for continued