Effect of Participation in Performance Pay Systems and Employees’ Satisfaction with Job Conditions

Arman Ismail, Aimi Anuar

Abstract


The aim of this research is to evaluate the association between participation in performance pay systems and employees’ satisfaction with job conditions. A survey method was utilized to collect data from subordinates who serve at disaster management agencies in West Malaysia. The findings of SmartPLS path model analysis display four important outcomes: first, the relationship between participation in pay plans and satisfaction with intrinsic job conditions was not significant. Second, relationship between participation in pay operations and satisfaction with intrinsic job conditions was not significant. Third, the relationship between participation in pay plans and satisfaction with extrinsic job conditions was significance. Finally, the relationship between participation in pay operations and satisfaction with extrinsic job conditions was significance. This finding demonstrates that participation in pay plans and participation in pay operations do not act as important predictors of employees’ satisfaction with intrinsic job conditions. Conversely, participation in pay plans and participation in pay operations do act as important predictors of employees’ satisfaction with extrinsic job conditions. Further, this research delivers discussion, implications and conclusion.


Keywords


participation in performance pay systems, intrinsic job satisfaction, extrinsic job satisfaction, SmartPLS

Full Text:

PDF

References


Aguinis, H. (2013). Performance Management, Heriot-Watt University.

Anuar, A., Ismail, A., & Abdin, F. (2014). Administrator’s role in performance pay system as a determinant of job satisfaction. Sains Humanika, 2(2), 11–17.

Chin, W. W. (2001). PLS-Graph user’s guide: Version 3.0. Houstan: TX: Soft Modelling.

Creswell, J. W. (2014). Research design: qualitative, quantitative and mixed methods approaches (Fourth edi). Carlifornia: SAGE Publication.

Danish, R. Q., & Usman, A. (2010). Impact of reward and recognition on job satisfaction and motivation: An emperical study from Pakistan. International Journal of Business and Management, 5 (2), P159.

Francis B-M., & Ophelia, D.D. (2011). Performance-Based Pay as a Motivational Tool for Achieving Organisational Performance: An Exploratory Case Study. International Journal of Business and Management, 6(12).

Gerhart, B., Rynes, S. L., & Fulmer, I. S. (2009). Pay and performance: Individuals, groups, and executives. Academy of Management Annals, 3: 251-315

Graen, G. (1976). Role making processes within complex organizations. In: M.D. Dunnette (Ed.). Handbook of industrial and organizational psychology.

Hair Jr., J. F., Hult, G. T. M., Ringle, C. M., & Sarstedt, M. (2017). A Primer on Partial Least Squares Structural Equation Modeling (PLS-SEM) (2nd Ed.). United States of America: SAGE publications Inc.

Henseler, J., & Chin, W. (2010). A comparison of approaches for the analysis of interaction effects between latent variables using partial least squares path modeling. Structural Equation Modeling: A Multidisciplinary Journal, 17(1), 82–109. https://doi.org/10.1080/10705510903439003.

House, R. J. . (1971). A Path Goal Theory of Leader Effectiveness. Publications, Sage, 16(3), 321–339.

Ismail, A., Zaidi, M. F., Anuar, A., Mohamad, H. A-B., & Ahmad, R. (2014). Effect of manager’s role in performance based pay on employee outcomes. Global Journal Al-Thaqafah, 4(2), 41–58.

Ismail, A., Anuar, A., Haron, M. S., & Kawangit, R. M. (2015). Reward administration system enhancing organizational commitment: An islamic viewpoint. International Letters of Social and Humanistic Sciences, 49, 155–167.

Ismail, A., Mashkuri, A., Sulaiman, A., Wong Kee Hock (2011). International justice as a mediator of the relationship between pay for perfomance and job satisfaction. Intangible Capital, 7(2): 213-235.

Ismail, A., Mohamed, H. A.-B., Sahol Hamid, N., Zaidi Sulaiman, A., Girardi, A., & Bin Abdullah, M. M. (2011). Relationship between performance based pay, interactional justice and job satisfaction: A mediating model approach. International Journal of Business and Management, 6(11), 170–181.

Jabatan Perkhidmatan Awam. Pelaksanaan Sistem Saraan Malaysia Bagi Anggota Perkhidmatan Awam Persekutuan (2002). Malaysia.

Milkovich, G.T., Newman, J.M. & Gerhart, B. (2013), Compensation (11th ed.), McGraw-Hill/Irwin, New York.

Newman, J. M., Gerhart, B., & Milkovich, G. T. (2016). Compensation (12th ed.). Europe, United States: McGraw Hill Education.

Nunally, J. C., & Bernstein, I. . (1994). Psychometric Theory. New York: McGraw Hill.

Pacheco, G., & Webber, D. (2016). Job satisfaction: how crucial is participative decision making? Personnel Review, 45(1).

Salim, S. S. & Ismail, A. (2016). Effect of Performance-Based Pay on Employees' Outcomes. Journalof Entrepreneurship and Business, 4(2), 30-41.

Sekaran, U., & Bougie, R. (2015). Research Methods for Business: A Skill-Building Approach (Sixth Edit). New Delhi.

Uieşi, S. (2016), “Motivational effects of pay dispersion in pay for performance programs implemented in Romanian companies”, Management & Marketing Challenges for the Knowledge Society, Vol. 10, No. 2, pp. 431-448.

Wainaina, L., Iravo, M., & Waititu, A. (2014). Effect of employee participation in decision making on the organizational commitment amongst academic staff in the private and public universities in Kenya. International Journal of Advanced Research in Management and Social Sciences,3 (12), 131-142,

Warr, P., Cook, J., & Wall, T. (1979). Scales for the measurement of some work attitudes and aspects of psychological. Journal of Occupational Psychology, 52, 129–148.

Yadav, M., & Rangnekar, S. (2015). Supervisory support and organizational citizenship behavior: Mediating role of participation in decision making and job satisfaction. Evidence-Based HRM:A Global Forum for Empirical Scholarship, 3(3), 258–278.




DOI: http://dx.doi.org/10.26737/jtmb.v3i2.217

Refbacks

  • There are currently no refbacks.


  
 

Published by:

Institute for Managing and Publishing of Scientific Journals STKIP Singkawang

JTMB (Jurnal Terapan Manajemen dan Bisnis)

e-ISSN : 2477-5282

p-ISSN : 2599-3127

Sekolah Tinggi Keguruan dan Ilmu Pendidikan (STKIP) Singkawang

Address : STKIP Singkawang, Jalan STKIP - Kelurahan Naram Singkawang, Kalimantan Barat, INDONESIA, 79251
No. Telp.   : +62562 420 0344
No. Fax.    : +62562 420 0584

  

Editor in Chief: [email protected] / [email protected] / Wa: +6282142072788

Support Contact: [email protected] / Wa: +6282142072788

Plagiarism Tools

JTMB Indexed by:

 

  Creative Commons License

Jurnal Terapan Manajemen dan Bisnis is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.