THE MEDIATING ROLE OF WORK ENGAGEMENT BETWEEN PAY SATISFACTION AND TURNOVER INTENTION

The relationship between pay satisfaction, work engagement and turnover intention has long been understudied. Drawing upon equity and social exchange theories, we hypothesized causal links between pay satisfaction, work engagement and turnover intention. Data were collected from professionals working in the Malaysian oil and gas sector (n = 409). Partial Least Squares Structural Equation Modelling (PLS-SEM) was used to test the hypothesized model. The results indicate that pay satisfaction positively affects employee work engagement; and work engagement negatively affects employee intentions to leave. An analysis of the indirect effects suggests that work engagement mediates the relationship between pay satisfaction and turnover intention. Findings from this study confirm the importance of pay satisfaction as the key to achieving higher levels of work engagement and reducing voluntary turnover. These findings provide important implications for research and human resource management practitioners.