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

In this study, pay is examined to understand it influences on employee retention, especially among IT employees in organization. The study also examines the mediating role of perceived organizational support on the relationship between pay and intention to stay. This study adopts quantitative approach to investigate the relationship between pay and intention to stay, and mediating role of perceived organizational support on this relationship. Toward this objective, a total of 832 questionnaires were mailed to a representative of the organization. A total of 220 questionnaires were returned, and only 178 were usable for further analysis, representing a response rate of 21.39%. Results from 178 participants indicate that salary and bonus were related to intention to stay. While perceived organizational support was found to partially mediate the relationships between salary and intention to stay, and fully mediate the relationship between bonus and intention to stay. This finding shows that pay and organizational support are crucial factors for encouraging employees to stay in organization. Thus, best practice of pay management must be implemented, and this practice will shows high level of organization support to employees’ need and well being. Consequently, employee retention can be managed efficiently.