A Study on Pay and Turnover Rate of High Tech Companies in Taiwan
Date Issued
2006
Date
2006
Author(s)
Lai, Li-Ann
DOI
en-US
Abstract
In today’s rapid changing business world, how to sustain the competitiveness is always the primary focus of the employers. One way to achieve this goal is to build up a mechanism to attract and retain the “right people” to the organization. Pay policy is one of the mechanisms for such purpose.
The purpose of this study is to undertake an empirical approach to investigate the potential relationship between the employee pay structure and the organization turnover rate. We suggest a conceptual framework which encompasses employee pay structure, including variable pay mix, pay competitiveness of total guaranteed cash, and pay competitiveness of total cash, as independent variables, and organization turnover rates, including turnover rate of all employees, turnover rate of R&D function, turnover rate of sales function, turnover rate of management level and turnover rate of non management level, as the dependent variables. In addition, this framework identifies company nationality and types of company operation as two key moderators on the relationship to be tested. The data source used in this study was derived from the 2005 Watson Wyatt Taiwan Total Rewards Survey high tech industry database, in which data samples included a total of 127 multinational companies and local companies. The data were analyzed by correlation, analysis of variance, and comparative statistics.
There were several important findings from our empirical analyses. (1) It was found that there was no significant relationship between employee pay structure and organization turnover rate. These results are in line with the trend of “total rewards” approach that suggests monetary reward alone can not achieve the talent retention purpose. The results also imply that non-monetary rewards may be more prominent to manage turnover intent. (2) When company nationality was added as a moderator, it was found that there were significant relationships between three independent variables with the turnover rate of all employees and the turnover rate of R&D function. This implies that multinational companies’ turnover is lower than local companies due to its flatter pay structure providing flexibility in pay practice. (3) When the types of company operation were analyzed, the only significance was found in the turnover rate of R&D function. When examined by comparative statistic, it was found that the turnover rate of R&D function is at its highest when variable pay mix occupies a high proportion of cash incentives, suggesting that the high-power-incentive approach is not an effective way to retain R&D people. Implications of these results and suggestions to companies in managing people retention are also discussed.
Subjects
薪資
薪資組合
薪資競爭力
離職率
Taiwan High Tech Industry
Pay Mix
Pay Competitiveness
Turnover Rate
Type
other
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