Does Generation Moderate the Effect of Total Rewards on Employee Retention? Evidence From Jordan

Abstract

Skill shortages along with changes in employee demographics have required that employers reconsider hitherto undifferentiated retention strategies in favor of a more targeted approach that accounts for precisely which total reward factors induce retention among talented employees. One notable gap in corresponding research is insufficient empirical data regarding the impact of employees’ generation on the relation between total rewards and retention. This article addresses existed gab(s) in the literature by exploring how total rewards—categorized into extrinsic, intrinsic, and social rewards—influence retention among two distinct groups in today’s labor force, Generation X and Generation Y, via surveys conducted among schoolteachers in Jordan. A total of 250 copies of structured questionnaire were administered to the high school teachers in the eastern areas of Jordan, while partial least squares structural equation modeling (PLS-SEM) was employed for the model analysis, and multigroup analysis was conducted to determine the moderating effects of generations. Findings revealed that no statistically significant difference in terms of the total rewards–employee retention relationship exists between the two generations. For both generations, extrinsic rewards had a significant impact on retention, while social rewards had none. Intrinsic rewards proved effective among Generation Y though not Generation X employees although the difference was minimal. Ultimately, in recruiting and managing employees of both generations in Jordan’s education sector, the results of this study indicate that employers should channel their resources primarily into providing attractive extrinsic rewards.