The mediating effect of work engagement on the relationship between total reward perceptions and employee retention

The current study investigates the impact of total reward perceptions on employee retention with the mediating effect of work engagement of executive-level employees in the Sri Lankan insurance industry. Data were collected employing a structured questionnaire utilizing simple random sampling technique. The sample consisted of 196 executive-level employees working in three general insurance companies. Simple linear regression analysis is used to test the direct relationships that exist between the variables, while the mediating impact was tested using the Sobel test. Results revealed a significant effect of total reward perceptions and work engagement on employee retention. The mediation of work engagement is also partially supported. Hence, the study extends the existing literature in work engagement, revealing its mediation effect on the relationship between total rewards perceptions and employee retention. Results obtained direct the companies to pay attention to the total rewards perception in terms of monetary, material, and non-monetary rewards in building a more engaged workforce. Appropriate rewards are essential for retaining and engaging employees in the organizations for a prolonged period of time.