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Introduction
The decision taken by any employee regarding whether to quit his/her organization or continue with it is influenced by several factors. Eliciting commitment from employees and retaining them both are critical issues (Chew and Chan, 2008). Organizations are continuously designing and introducing innovative HR practices to deal with such challenges.
Compensation as a high-performance work practice (HPWP) reduces the level of voluntary turnover (Selden and Sowa, 2015). Rewards and recognition practices feature as an integral component of compensation. Rewards are considered to be more appropriate for employee behaviors that exhibit adherence to rules (Hansen et al., 2002). If designed appropriately, reward systems can lead to challenges, fulfillment and satisfaction or otherwise to mistrust, perceived inequity and uncertainty (Ganster et al., 2011). Recognition, on the other hand, is directed to bring out intrinsically motivated behaviors like commitment, innovativeness and initiatives (Hansen et al., 2002). Rewards and recognition together serve as an organizational strategy that not only is wide in scope, but also leads to work-related outcomes. Organizations are hence adopting unconventional and creative methods to restructure their rewards and recognition programs for engaging and retaining their workforce. The total rewards system is viewed as a promising way of enriching rewards and recognition practices to support employee well-being and boost organizational effectiveness (Jiang et al., 2009; Hulkko-Nyman et al., 2012).
A high-performance work system (HPWS) integrates performance-based practices that link the exchange–effort relationship of employees to positive work-related outcomes (Heffernan and Dundon, 2016). Compensation as an HPWP is inextricably connected with fairness or justice. “Rewards are a key ingredient of fairness perceptions as they impact multiple types of justice” (Jackson et al., 2012, p. 647). Perception of equity is related to some key HPWS outcomes like pay satisfaction, commitment (Tekleab et al., 2005) and intention to stay as a job attitude (Roberts et al., 1999; cf. Chew and Chan, 2008). On the contrary, perceived inequity might increase employee turnover (Kenny and McIntyre, 2005).
Considering the significance of organizational justice (OJ) in determining the effectiveness of HR practices, this paper aims to answer how total rewards might influence intention to stay among employees, by exploring the intervening roles played by OJ and engagement. Overall, a...