Should I stay or should I go: how pay secrecy influences turnover intentions

Abstract

Purpose The purpose of this study is to extend the pay communication literature by examining the relationship between pay secrecy and turnover intentions with the inclusion of mediators. This study further analyzes the influence pay secrecy and organizational trust have on three key employee attitudinal variables that are directly related to turnover intentions. Design/methodology/approach The data were collected from participants that were recruited using Mechanical Turk, yielding a sample size of 496. Structural equation modeling (SEM) was used to analyze the hypotheses. Findings Findings demonstrate pay secrecy positively influences turnover intentions. This relationship is double-mediated by organizational trust with organizational cynicism, organizational disidentification, and job embeddedness. All hypotheses were supported. Practical implications This research shows that pay secrecy has negative effects on employee attitudes and behaviors. Based on the findings of this study, organizations should take steps toward pay openness to avoid employees becoming distrustful and more cynical of the organization, boost feelings of being embedded, and deter organizational disidentification. Originality/value This study contributes to the pay communication literature by further explaining the pay secrecy–turnover intentions relationship with the inclusion of mediators that have shown mixed results or have not been previously analyzed to the researchers' knowledge. Specifically, organizational trust, organizational cynicism, organizational disidentification, and job embeddedness were examined as mediators. Previous research has shown mixed results for the influence pay secrecy has on organizational trust, with some studies demonstrating pay secrecy to have a positive effect and others a negative effect. This study demonstrates support for pay secrecy's negative relationship with organizational trust.