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 “hard”HR
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).