Talent management and organizational commitment: the partial mediating role of pay satisfaction

DOIhttps://doi.org/10.1108/ER-11-2019-0429
Publication Date06 Apr 2020
Pages863-881
AuthorRoberto Luna-Arocas,Ignacio Danvila-Del Valle,Francisco J. Lara
SubjectHR & organizational behaviour,Industrial/labour relations,Employment law
Talent management and
organizational commitment: the
partial mediating role of
pay satisfaction
Roberto Luna-Arocas
Department of Business Management, Valencia University, Valencia, Spain
Ignacio Danvila-Del Valle
Department of Business Organization, Faculty of Economic and Business Sciences,
Complutense University of Madrid, Madrid, Spain and
Escuela de Ciencias Econ
omicas y Empresariales, Universidad Panamericana,
Mexico, and
Francisco J. Lara
Department of Business Management, CUA - The Busch School of Business,
Washington, District of Columbia, USA and
Department of Business Management, Catholic University of Valencia,
Valencia, Spain
Abstract
Purpose The purpose of this study is to better understand the role of pay satisfaction and employee
perception of talent management in business loyalty strategies, which implies considering both economic and
non-economic variables in order to achieve organizational success.
Design/methodology/approach Results from a survey of 198 workers were analysed using structural
equation modelling (SEM) based on three constructs (confirmatory factor analysis, CFA). The scales used were:
employee perception of talent management, pay satisfaction, and organizational commitment. Pay satisfaction
acts as a mediating variable in the significant relationship between the perception of talent management and
organizational commitment.
Findings The partial mediating model hypothesised was supported by the SEM model, indicating that
loyalty strategies require both good talent management and a good compensation system.
Research limitations/implicationsThe article promotes the use of mediating variables as an explanation
to better understand the strategies of loyalty in the management of talent, framed within the model of the
resource-based view (RBV) theory.
Practicalimplications The implications are importantfor practitioners,who normally put every effort into
strategies related to economic reinforcement, since the model suggests that they should also strive to correctly
apply talent management.
Social implications The study suggests the need to understand better retributive systems with an
application of talent management based on improvement and professional development.
Originality/value The originality lies in the article stating that the application of good talent management
must be complemented with adequate compensation systems in order to achieve efficient retention strategies
for talented employees.
Keywords Talent management, Organizational commitment, Pay satisfaction
Paper type Research paper
Introduction
At present, the vast majority of organizations operate in a complex, diverse, dynamic, highly
competitive and extremely volatile environment, and face problems that have often not yet
even emerged (Tarique and Schuler, 2010). In this context, companies must meet the
Talent manage-
ment and
organizational
commitment
863
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/0142-5455.htm
Received 9 November 2019
Revised 27 January 2020
Accepted 19 February 2020
Employee Relations: The
International Journal
Vol. 42 No. 4, 2020
pp. 863-881
© Emerald Publishing Limited
0142-5455
DOI 10.1108/ER-11-2019-0429
challenge of knowing how to effectively manage their human capital so that they are able to
generate and maintain sustainable competitive advantages (Dries, 2013;Ulrich, 2007). The
challenge of gaining a competitive advantage through human resources and talent
management in an organization is a significant one (Wright et al., 2001;Collings and
Mellahi, 2009). According to the RBV theory (Barney, 1991;Becker and Huselid, 2006;Collis
and Montgomery, 1995;Delery, 1998;Teece et al., 1997;Wernerfelt, 1984;Wright et al., 2001),
firms use tangible and intangible resources (such as human capital) to develop business
strategies. This competitive advantage is linked directly to the capabilities of the talented
individuals who work in the companies (Cheese et al., 2008) and also ties in with talent
management practices that work with the organization in an effort to attract, develop, and
retain talent (Luna-Arocas, 2018).
In many companies, a shortage of talent poses an obstacle that hinders the implementation
of successful strategies (Farndale et al., 2010). For this reason, the number of academic studies
into talent management has increased substantially in recent years (Thunnissen et al., 2013;
Valverde et al., 2013;Sidani and Al Ariss, 2014;Collings et al., 2015;Luna-Arocas and Morley,
2015;Thunnissen, 2016;Gallardo-Gallardo and Thunnissen, 2016), and is also due to the fact
that talented people are related with exceptional results and high performance in the firm.
Therefore, companies seek to further the implementation of talent management strategies
and to know what impact they have on organizational variables such as organizational
performance, where identifying and retaining key personnel proves essential. Thus, this
study covers an important gap when analysing the relationship between talent management
strategies and organizational commitment as well as pay satisfaction.
Talent strategies generate meritocracy and equity in the organization and, therefore, have
the capacity to trigger organizational commitment (Luna-Arocas, 2018). In fact, for Ulrich
(2007) there is a clear formula: talent 5competence 3commitment 3contribution. Talent
management strategies involve the loyalty of talented employees so that they can continue
contributing to organizational performance. In this sense, organizational commitment has
been studied extensively in HR literature (Allen and Meyer, 1990;Cohen, 2008;Jaros et al.,
1993;Mayer and Schoorman, 1998;Meyer and Herscovitch, 2001;Morris et al., 1993;Mowday,
1998;Nam and Lee, 2018;Paul et al., 2019) and has also been related with TM (Bj
orkman et al.,
2013;Malik and Singh, 2014;Malilk et al., 2017).
This is the origin of the so-called the war for talent(Michaels et al., 2001) where firms are
changing strategies in order to incorporate a talent mindset in manager competence. These
authors affirm in their book that there are three forces that fuel the war for talent: the shift
towards the knowledge age, the demand for specialized talent, and the growing tendency for
employees to switch companies. This continuous change implies the need to establish loyalty
strategies in organizations in order to retain the best talent. Since the literature on talent
management is still very recent, there are as yet not enough studies exploring which
mediating variables explain how to engender loyalty and commitment in organizations.
Money is another key variable in companies, and is normally included in hardHR
strategies. Indeed, managers may use pay strategies to attract, retain, and motivate
employees and to achieve organizational goals (Luna-Arocas and Tang, 2004;Milkovich et al.,
2014;Mitchel and Mickel, 1999). However, the role of pay satisfaction in the context of the
relationship between talent management and organizational commitment remains
underexplored. In fact, McDonell et al. (2016) wonder to what extent organizations have
the right balance in compensation strategies to motivate and retain employees.
Therefore, this study has two clear objectives. Firstly, it aims to examine the role of talent
management in its relationship with organizational commitment from an individual level of
employees, and secondly to analyse the role of pay satisfaction in the impact that talent
management has on loyalty strategies. Employee perception of talent strategies is essential to
understand the real impact they have on the organization (Nishii and Wright, 2008).
ER
42,4
864

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