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Introduction
In any organisation, rewards play an important role in sustaining high levels of individual performance, in addition to promoting employees’ commitment and involvement. In order to attract and retain skilled employees, companies have developed multifaceted compensation systems. However, the ongoing economic crisis has forced many organisations to rethink their reward strategies, leading them to combine monetary and non-monetary rewards through the adoption of a total rewards system (TRS). This system presumes that people are interested in partnering with organisations that provide not only attractive economic conditions, but also a compelling future, individual growth, and a positive workplace.
Organisations invest in both monetary and non-monetary rewards in order to signal their interest in and appreciation towards their employees and, like any other form of investment, rewards are often measured in terms of their return. Thus, organisations have become increasingly interested in understanding the impact of their adopted human resource management (HRM) practices on employees’ attitudes and behaviours (Appelbaum et al., 2000; Nishii et al., 2008; White and Bryson, 2013).
However, monetary and non-monetary rewards have rarely been considered together from the HRM perspective. Despite the vast literature on HRM, there is still a dearth of studies that explicitly describe the link between adopting a TRS and employees’ consequent attitudes and behaviours. Nonetheless, it might be useful to understand whether organisations benefit more from adopting a whole TRS or just some of its separate components. This is an important and under-explored issue that deserves greater consideration, especially in the wake of increasing global competition.
The present study intends to fill this gap by investigating the impact of employees’ perceptions of TRS on a range of employee outcomes such as job satisfaction, affective commitment, and the tendency to adopt innovative behaviours.
By addressing the relationship between TRS and employees’ attitudes and behaviours, we contribute to the HRM literature. More specifically, we explore the differential role of three main components (i.e. fair base pay, training and development opportunities, and positive work environment) that qualify monetary and non-monetary rewards. Our findings support the notion that distinct compensation practices may be more effective in fostering certain employees’ outcomes than others. Therefore, our findings contribute to the literature by providing useful insights on how to constitute coherent bundles of...