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SA Journal of Human Resource Management
ISSN: (Online) 2071-078X, (Print) 1683-7584

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Authors:
Calvin M. Mabaso1
Bongani I. Dlamini2

Affiliations:
1Department of Industrial
Psychology and People
Management, University of
Johannesburg, South Africa

2Faculty of Management
Sciences, Durban University
of Technology, South Africa

Corresponding author:
Calvin Mabaso,
[email protected]

Dates:
Received: 13 Feb. 2017
Accepted: 14 Mar. 2018
Published: 17 May 2018

How to cite this article:
Mabaso, C.M., & Dlamini, B.I.
(2018). Total rewards and its
effects on organisational
commitment in higher
education institutions. SA
Journal of Human Resource
Management/SA Tydskrif vir
Menslikehulpbronbestuur,
16(0), a913. https://doi.org/
10.4102/sajhrm.v16i0.913

Copyright:
© 2018. The Authors.
Licensee: AOSIS. This work
is licensed under the
Creative Commons
Attribution License.

Introduction
Key focus of the study
Talent retention has been reported as a significant challenge for organisations operating in a
competitive environment. Competing for employees with the required skillset and attracting and
retaining employees with expertise has emerged as the biggest challenge for human capital
managers. However, in higher education institutions, retaining of staff has become a priority. In
addition, higher education is influential in the development of a country. It not only functions as
a provider of knowledge but also as a pertinent sector for the nation’s grown and societal well-
being. Higher education institutions play a significant role in development of skills, which
improves the economy; therefore, a high quality of staff is required. Higher education institutions
are also considered as a centre of research, knowledge, change and excellence that is skilled in
acquiring, generating and transferring knowledge to society. The study aims to investigate the
relationship between total rewards and retention factors in relation to organisational commitment
in higher education institutions.

Background to the study
Enhancing organisational commitment among academic staff is an essential element because it will
eventually result in higher employee commitment, retention and improved performance. Therefore,

Orientation: Retaining staff with special endeavours within higher education institutions has
become a top priority and crucial for any organisational productivity and competiveness.
Attracting and retaining talent has remained a critical and complex issue for human capital
management in organisations.

Research purpose: The purpose of this study was to investigate the impact of total rewards on
organisational commitment measured by Total Rewards Scale and Organisational Commitment
Questionnaire.

Motivation for the study: There is paucity in research on the impact of total rewards on
organisational commitment. Commitment of academic staff is significant as higher education
institutions are influential in the development of a country.

Research design, approach and method: This study employed the quantitative research
method using a survey design. A semi-structured questionnaire was used to collect survey
data. A sample of 279 academic staff, which was the total population of participants, was
selected for this study.

Main findings: Results show a positive and significant correlation between elements of total
rewards (performance management, 0.387; recognition, 0.335; talent development and career
opportunities, 0.328; compensation, 0.231; benefits, 0.213; work–life balance, 0.024) and
organisational commitment. A variance of 52.3% of total rewards explained organisational
commitment. Performance management, compensation, benefits, recognition, talent
development and career opportunities significantly predicted organisational commitment.
However, work–life balance indicated a negative effect on organisational commitment.

Practical managerial implications: Findings of the study has implications to managers because
they have to encourage and promote total rewards in order to enforce talent retention within
higher education institutions for the benefit of both institutions and employees.

Contribution: The results are important to managers with great interest in talent retention and
can be used as guideline to develop rewards strategy.

Total rewards and its effects on organisational
commitment in higher education institutions

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identifying total rewards that influence organisational
commitment in higher education institutions will aid the
sector to foster organisational commitment, while maintaining
high satisfaction and improved performance. Ihionkhan and
Aigbomian (2014) attest that organisations are effective to the
degree which it achieve its objectives through committed
employees. In addition, Korir and Kepkebut (2016) state that
committed employees have a sense of identification and
belonging with an organisation. Dubihlela and Rundora
(2014) affirm that an increase in global competition has forced
businesses to ensure increased employee commitment in
order to enable them to have a high level of excellence and
competitiveness. Wasiu and Adelajo (2014) suggest that the
importance of total rewards cannot be over emphasised. Well-
rewarded employees feel that they are valued by the
organisation. Anku-Tsede and Kutin (2013) state that
rewarding employees is ideal in today’s complex human
resources market, which leads to continually changing
settings in which organisations compete for survival. Obicci
(2015) affirms that as employees are the engines of
organisational vehicles, total rewards is the fuel through
which organisations’ stated objectives can be achieved.
Ihionkhan and Aigbomian (2014) state that rewards
management strategies can be used to increase employee
commitment by creating a sense of belonging in the
organisation. Increased levels of employee commitment
can be achieved through effective rewards management
strategies. Korir and Kipkebut (2016) advised organisations
to take actions such that employee commitment can be
obtained through total rewards management.

Research purpose and objectives
There is a limited research investigating specifically the
relationship between total rewards and organisational
commitment both locally and internationally. The main
purpose of this study was to investigate the impact of total
rewards on organisational commitment. The objectives of the
study were to investigate the relationship between total
rewards and organisational commitment. In addition, the
following research questions were investigated:

• Research question 1: What is the relationship between
total rewards and organisational commitment?

• Research question 2: Which total rewards elements
influence organisational commitment significantly?

Significance of the study
Highly qualified and experienced employees of the academic
institutions are continuously leaving in search of greener
pastures and opportunities in other institutions and in the
private sector. Those left behind may end up underperforming
owing to low motivation because of insufficient reward
strategies (Al-Jarradi, 2011). This study aims to assist the
management of universities of technology to have the
opportunity to be more aware about the influence of total
rewards on organisational commitment. The findings of the
research should also contribute to broader understanding in
both public and private sectors on the significant role of total

rewards in organisational commitment among employees.
The study will benefit other institutions of higher learning,
that is, traditional universities, universities of technology to
understand total rewards that best drive organisational
commitment.

Literature review
Organisational commitment
Commitment in the workplace is a concept that has
attracted a great deal of attention from scholars in many
disciplines, including industrial psychology, organisational
behaviour, management, business administration and public
administration (Cohen, 2007). In addition, high interest in
research, which is concerned with organisational commitment
of employees, has been observed within the private sector,
public sector and higher education sector (Dixit & Bhati,
2012). Khan et al. (2014) state that organisational commitment
is a link, association or bond of the employee with the
institution, a psychosomatic state that distinguishes the
individual association with the proposition for the decision
to carry on attachment to the organisation. Lamba and
Choudhary (2013) view organisational commitment as the
individual psychological attachment to the organisation, and
commitment represents something beyond loyalty to an
organisation and involves an active relationship with the
organisation such that individuals are willing to dedicate their
talents in order to contribute to the organisation’s well-being.

SamGnanakkan (2010) states that organisational commitment
is a bi-dimensional concept that includes an attitudinal and a
behavioural aspect. Committed employees have an active
curiosity, a passion for learning, a willingness to challenge
the status quo and an eagerness to experiment with new
methods and strategies (Jafri, 2010). In addition, Cunningham
(2012) states that an employee with a high level of
organisational commitment wishes to maintain membership
of the organisation, and this commitment differs from other
types, such as occupational commitment. Welty, Burton and
Wells (2014) reveal that employees with higher level of
organisational commitment will be less likely to engage in
job search behaviours as they would wish to stay and be
associated with their organisation. In addition, employees
with high level of commitment contributes positively to
the organisation. In addition, organisational commitment
encompasses an employee’s belief in an organisation’s goals
and values, and reflects a desire by an employee to remain a
member of the organisation and be loyal to it. Committed
employees have an active curiosity, a passion for learning, a
willingness to challenge the status quo and an eagerness to
experiment with new methods and strategies (Jafri, 2010).
Organisational commitment is a psychological state that
impels an individual towards a course of action of relevance
to one or more targets (Smith, Mitchell & Mitchell, 2009).
Therefore, organisational commitment results in positive
attitudes to jobs and affects outcomes like employee’s
intention to leave, organisational citizenship behaviour,
performance and job satisfaction (Neininger, Lehmann-
Willenbrock, Kauffeld & Henschel, 2010). However, human

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resources practices like total rewards influence the
commitment of employees in both positive and negative
manner (Döckel, 2003; Lumley, 2010). Hence, these practices
are significant in retaining talent within organisations.

Total rewards that retain talent
In order to attract, retain and satisfy committed employees
to the organisation, employers need appropriate total
rewards (Obicci, 2015). Owing to competition for scarce
skills, the attraction and retention of quality employees has
emerged as the biggest challenge in human capital
management (Terera & Ngirande, 2014). Enhancing
organisational commitment among employees is an essential
element because that will result in higher employee
commitment, enhancing retention, increasing their job
satisfaction and improving performance (Omotayo,
Pavithra, & Adenike, 2014). In addition, bringing out the
effects of total rewards will assist organisations foster
commitment among employees. Research by Armstrong,
Brown and Reilly (2010) reveals that competitive wages and
benefits have repeatedly been listed as a means of attracting
and retaining employees. Chelangat and Gachunga’s (2016)
study reveals that total rewards are considered as one of the
tools for enhancing organisational commitment. Obicci
(2015) attests that total rewards play a vital role in job
satisfaction and enhances employee commitment with their
respective organisations. Wages, therefore, influence the
attraction and retention of the workforce. Organisations
need to look for alternative methods of retaining key talent
to ensure organisational success (Mabaso, 2016). Hence,
total rewards can be used in order to enforce talent retention
among academic staff in higher education institutions.

Total rewards
WorldatWork (2015) recommended a total rewards model
with six essential elements, which are discussed in detail
below. WorldatWork (2015) asserts that these elements of
total rewards collectively define an organisation’s strategy to
attract, motivate, retain and engage employees.

Compensation as element of total rewards
Compensation is the reward that employees receive in
exchange for performing organisational tasks (Omotayo,
Pavithra & Adenike, 2014). In addition, WorldatWork (2015)
postulates that compensation refers to remuneration
provided by the employer for services rendered by
employees, which include skills, time and their efforts.
WorldatWork (2015) affirms that compensation consists of
both fixed and variable pay, and it is sometimes tied to
performance. Martocchio (2013) states that compensation
represents both intrinsic and extrinsic rewards employees
receive for performing their jobs. Intrinsic compensation
reflects employee’s psychological mindsets that result from
performing their jobs. Extrinsic compensation includes both
monetary and non-monetary rewards (Martocchio, 2013).
Total compensation is ‘the total of all rewards provided to

employees in return for their services’ (Phonsanam, 2010:6).
Ray and Ray (2011) observed that the main reason people
work for is compensation. Rose (2014) confirms that
compensation forms part of the elements of total rewards
aiming to attract and retain talent in organisations.

Fringe benefits as element of total rewards
WorldatWork (2015) states that benefits comprise non-
monetary rewards to supplement financial compensation that
employees receive. Martocchio (2013) states that fringe benefits
include any variety of programmes that provide time off,
employee services and protection programmes. According to
Van der Westhuizen (2017), fringe benefits refer to indirect
forms of compensation which are intended to attract, retain
and motivate employees. Rose (2014) attests that fringe benefits
consist of non-cash parts of the reward that are provided by
the employer either to all employees or differentiated by level.
Employee benefits consist of arrangements made by employers
to enhance their employees’ well-being. The benefits are
provided in addition to pay and form important parts of the
total rewards package (Armstrong, 2012). Benefit packages for
employees are integral to the financial reward package, and for
many organisations, the employer brand determines the type
of benefits offered, which turn, support the messages to be
delivered via the employer brand.

Work-life balance as element of total rewards
WorldatWork (2015) states that work–life programmes are
intended and introduced as policies that enable employers to
reach a better work–life balance. This factor includes the
extent to which a specific job is interesting and challenging to
an individual, the degree to which the job provides
the opportunity for an individual to keep abreast of new
things (WorldatWork, 2015). According to Mukhtar (2012),
integrating and maintaining work–life balance into our lives
is the current need. Rumpel and Medcof (2006) attest that
usually the balance time spent at work and home is included
in the work environment. Flexible working is one of the most
important aspects for a balanced life (Hondor, 2014).

Performance as element of total rewards
Aguinis (2013) defines performance management as a
continuous process of identifying, measuring and developing
the performance of individuals, teams and aligning
performance with the strategic goals of the organisation. In
addition, Swanepoel et al. (2014) affirm that performance
management is an action based on performance measures
and reporting, which results in improvement in employee
behaviour, motivation and work processes as well as
promoting innovation. Performance management is viewed
more broadly as a management tool that aims to improve the
performance of an organisation (Goh, 2012).

Recognition as element of total rewards
Rose (2014) states that recognition refers to a process of
acknowledging or giving special attention to a high level of

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accomplishment or performance, such as customer care or
support to colleagues, which is not dependent on achievement
against a given target or objective. Greene (2011) attests that
recognition can be used in lieu of financial awards, as
particularly it could be argued that people used time that
theoretically should have been spent on other organisational
businesses and that the salary provided compensation. Abu
Bakar, Mohamad and Sharmeela-Banu (2015) posit that
recognition is the demonstration of appreciation for a level of
performance, an achievement or a contribution to an
objective. It can be confidential or public, causal or formal
and it is always in addition to pay. The link between
recognition, teamwork and job satisfaction is an important
occurrence to take note of as it indicates that dimensions,
which constitute job satisfaction, do not necessarily act alone
in determining the job satisfaction of employees. The lack of
recognition would not lead to job dissatisfaction, but
employees are unlikely to be unmotivated (Smerek &
Peterson, 2007).

Talent development and career opportunities as
element of total rewards
It is a set of learning experiences intended to improve
employees’ functional expertise and capabilities. It motivates
employees to complete their tasks quickly which in turn
improves their productivity (Hondor, 2014). WorldatWork
(2015) states that career opportunities involve a strategy for
employees to develop their career goals, which may include
advancement into a more responsible position in an
organisation. Greene (2011) affirms that the investment in
training and development is to increase capacity among
employees which will enable career opportunities in the
workplace. Martocchio (2013) concurs that talent
development will enable employees to maintain their focus
and assume greater responsibilities and advance in the
organisation hierarchy.

Research hypothesis
Based on the above literature, the following hypothesis was
developed:

• Hypothesis 1 (H
1
): There is a positive relationship

between total rewards and organisational commitment.

Research design
Research approach
In the present study, a quantitative research design was
employed using the survey questionnaire. The aim of the
quantitative research is to describe patterns, trends and
relationships in numerical data (Lochmiller & Lester, 2017).
The main reason for choosing this method was that variables
used in the present study could be easily measured
quantitatively. In addition, the quantitative research method
is concerned with the facts or responses of participants
(Creswell, 2014). The most common characteristic of
quantitative studies is generalisability of the results.
Generalisability is the assumption that data from a sample

represent the larger population from which the sample is
drawn. Lochmiller and Lester (2017) affirm that in the
quantitative research method, the research assumes that the
results represent the broader population on some measures.

Research method
Research participants
This study was conducted in the higher education sector of
South Africa. The target population in the present study
comprised 279 (University of Technology A = 79; University
of Technology B = 200) academic staff from two universities
of technology (UOT) in Gauteng and Free State (from level of
lecturers, senior lecturers, head of departments and
professors). Of the 279 participants, 225 returned the
questionnaires to the researcher. However, upon scrutiny it
was discovered that 23 respondents did not answer the
majority of the questions. These questionnaires were
therefore discarded completely. A response rate of 72.4% was
achieved. Therefore, questionnaires returned for analysis
equated to n = 202 questionnaires which was appropriate to
be used on the study. An analysis of the demographic profile
of respondents (Table 1) has been distributed to as per
response from both universities of technology. In addition,
Table 1 reveals that 50.5% (n = 102) of the respondents were
female, whereas 49.5% (n = 100) were male. After collapsing
the respondents’ ages, it emerged that the largest group of
respondents (43.6%; n = 88) were aged between 30 and 45
years. In addition, 38.1% (n = 77) of the respondents were in
possession of a master’s degree. In terms of racial group,
Africans (68.8%; n = 139) constituted the highest number.
With regard to the position occupied, the largest group of

TABLE 1: Demographic profile of respondents (N = 202).
Variable Categories UOT A UOT B N %

Gender Male 34 66 100 49.5
Female 45 57 102 50.5

Age 18–29 18 32 49 24.3
30–45 22 66 88 43.6
46–64 37 24 61 30.2
> 65 2 2 4 1.9

Race African 41 108 139 68.8
Indian 3 12 14 6.9
White 29 12 41 20.3
Mixed race 6 2 8 4.0

Tenure 0–1 year 18 4 22 10.9
1–4 years 13 37 50 24.8
5–7 years 13 55 68 33.7
7–15 years 35 27 62 30.7

Qualification Honours degree 7 21 33 16.3
Master’s degree 36 33 77 38.1
PhD 7 10 17 8.4
B.Tech 17 20 35 17.3
M.Tech 5 28 33 16.3
D.Tech 7 0 7 3.5

Rank Lecturer 70 111 181 89.6
Senior lecturer 5 9 14 6.9
Associate professor 0 1 1 0.5
Professor 2 0 2 1.0
Head of department 0 4 4 2.0

UOT, universities of technology.

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respondents (89.6%; n = 181) were lecturers, followed by
senior lecturers (6.9%; n = 14), with associate professors
(0.5%; n = 1) being the least in number.

Measuring instrument
A structured questionnaire was designed to gather information
from participants. The current study used two measuring
instruments; that is, ‘Total Rewards Questionnaire’ and
‘Organisational Commitment Questionnaire’. Total Rewards
Questionnaire was adopted from WorldatWork Rewards
(2015), while Meyer and Allen (1997) developed Organisational
Commitment Questionnaire. These two questionnaires were
administered to the selected respondents. Both these
instruments are based on the five-point Likert scale. The
respondents were asked to indicate the extent of their agreement
or disagreement with the statements on a scale of 1–5, where 1
would mean that they strongly disagreed and 5 would mean
that they strongly agreed with the statement provided.

Ethical consideration and research procedure
Permission to conduct the research was obtained from the
participating universities of technology. Research participants
were requested to participate in the study voluntarily by
completing questionnaires. A covering letter accompanied each
questionnaire stating the purpose of the research and
guaranteeing protection of their identity as this was an
anonymous survey. A total of 279 questionnaires were
distributed to all academic staff using a personal method of
data collection. To ensure confidentiality, questionnaires were to
be returned in enclosed envelopes provided during distribution.

Reliability
Maree (2017) states that reliability refers to the consistency or
dependability of a measuring instrument. A measuring
instrument that is reliable will produce the same results if a
variable is repeatedly measured under almost identical
circumstances. The Cronbach’s alpha was calculated for each
construct to determine the scale reliability. Thurston and
McNall (2010) reported that Cronbach’s alpha should range
from the lowest of 0.68 and to the highest of 0.93. The Total
Rewards Scale results (0.822).

Data analysis
Data were analysed with the aid of the Statistical Package
for the Social Sciences (SPSS version 24). Descriptive statistics

was used to analyse biographical information. Initially,
demographic data of the subjects, frequencies and the scores of
the overall work-related factors as well as measures of central
tendency were established. Pearson correlation analysis and
linear regression were computed on all the variables.

Ethical considerations
The study accompanied a letter explaining the ethical
considerations involved, notably that participating in the
study was a voluntary exercise and that the respondents
could withdraw from the study at any point.

Results
The following results will be presented: correlation and
regression analysis.

Research question 1 and hypothesis 1
In order to answer the first research question to determine
the relationship between total rewards and organisational
commitment and hypothesis 1, correlation analysis was
performed to test the strength and directions of the
relationship between variables as illustrated in Table 2.

Pearson correlations allowed the researcher to identify the
direction and strength of the relationship between each
variable. As illustrated in Table 2, significant and positive
relationships were observed between variables of total
rewards and organisational commitment. The results of the
correlation indicate a positive and significant relationship
between the elements of total rewards and organisational
commitment (performance management, 0.387; recognition,
0.335; talent development and career opportunities, 0.328;
compensation, 0.231; benefits, 0.213; work–life balance,
0.024). The results in Table 2 reveal a positive and significant
relationship between organisational commitment and four
elements of total rewards (performance management,
recognition, talent development and career opportunities,
compensation and benefits). No significant relationship
between work–life balance and organisational commitment
was observed. This reveals that academic employees in
higher education institutions will be committed if these
elements of total rewards are provided by the employer.
Based on the results in Table 2, the relationship between total
rewards and organisational commitment is positive and the

TABLE 2: Significant Pearson correlations.
Variables 1 2 3 4 5 6 7

Compensation 1.000 – – – – – –
Benefits 0.087 1 – – – – –
Work–life balance 0.045 -0.172* 1.000 – – – –
Performance
management

0.285** -0.011 0.307** 1.000 – – –

Recognition 0.184** 0.073 0.067 0.335** 1.000 – –
Talent development
and career
opportunities

0.121 0.088 0.077 0.291** 0.335** 1.000 –

Organisational
commitment

0.231** 0.213** 0.024 0.387** 0.328** 0.404** 1.000

*, Correlation is significant at the 0.05 level (2-tailed); **, Correlation is significant at the 0.01 level (2-tailed).

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hypothesis is accepted that total rewards is positively related
to organisational commitment. Pallant (2010) explains that
the strength of the association between variables depends on
the size (whether positive or negative) of the correlation
value. A value ranging from 0.10 to 0.29 denotes a small
relationship, values between 0.30 and 0.49 represent a
medium relationship and a value of 0.5–1.0 depicts a strong
relationship between the variables.

Multivariate regression analysis was undertaken to
determine the effects of total rewards on organisational
commitment among academic staff. In Table 3, the regression
model summary and ANOVA results are reported.
Regression analysis is a statistical technique that focuses on
investigating and modelling the relationship between
variables (Montgomery, Peck & Vining, 2012). Regression
analysis aids to measure the relative strength of an
independent variable on a dependent variable.

As illustrated in Table 3, the significant F-ratio infers that the
regression model predicts effects of total rewards. The value of
R2 indicates that the model tested is significant, that is, the
value of R2 is 0.523, which means that there is 52.3% relationship
between independent variable (total rewards) and dependent
variable (organisational commitment). Cohen, Manion and
Morrison (2011) suggested that R2 > 0.5 indicates a strong
model fit. Therefore, these results confirm that total rewards
have a greater impact on organisational commitment.

Additionally, regression was conducted as to evaluate
the independent variables prediction of organisational
commitment and is delineated in Table 4.

These results outlined in …