The Study on The Relationship of Compensation and Turnover Intention – The Case of China Employees

This study aims to investigate the employees in China and analyze the relationship between the turnover intention and the compensation satisfaction by three dimensions: distributive justice, procedural justice and interactional justice. From the different constructs, the study looks into the relationship between employee compensation satisfaction and turnover intention, using six items from the demographic statistical variables, including gender, age, marital status, work seniority, education, and occupation, as the background parameters. Such variables are used to analyze the impact and differentiation of the distributive justice, procedural justice and interactional justice of compensation satisfaction and the turnover intention. This study adopts questionnaire survey and verifies through the use of descriptive statistics analysis, validity analysis, correlation analysis, regression analysis, and ANOVA analysis. This study results are summarized in the follows: 1. The three constructs used for measuring compensation satisfaction include: distributive justice satisfaction, procedural justice satisfaction and interactional justice satisfaction; whereas the negative correlation with turnover intention suggests that higher compensation satisfaction leads to lower turnover intention. In particular, the impact of the compensation distributive justice satisfaction is higher than compensation procedural justice satisfaction and compensation interactional justice satisfaction. 2. There is a significant difference between employees of different ages to the compensation distributive justice satisfaction. 3. There is a significant difference between employees with different education to the compensation procedural justice satisfaction. The purpose of the study results is to provide some valid data as reference for the business managers in China. The design of compensation system should take into consideration of compensation standards inside and outside of the organization as well as the opinions, participation and freedom of speech of employees during the decision-making process. The communication and interaction between the managers and employees needs to take into account of the different types of employees, in order to carry out proper and fair compensation management, lower employee turnover, stabilize human resource within the organization, boost employee performance, and thereby to build a people-oriented win-win situation. Keywords: Compensation Satisfaction, Distributive Justice, Procedural Justice, Interactional Justice.