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Empirically testing the relationship between income distribution, perceived value money and pay satisfaction
Abstract and Figures
Compensation management literature highlights that income has three major features: salary, bonus and allowance. If the level and/or amount of income are distributed to employees based on proper rules this may increase pay satisfaction. More importantly, a thorough investigation in this area reveals that the effect of income distribution on pay satisfaction is not consistent if perceived value of money is present in organizations. The nature of this relationship is less emphasized in pay distribution literature. Therefore, this study was conducted to measure the effect of the perceived value of money and income distribution on pay satisfaction using 136 usable questionnaires gathered from employees who have worked in one city based local authority in Sabah, Malaysia (MSLAUTHORITY). Outcomes of hierarchical regression analysis showed that the interaction between perceived value of money and income distribution significantly correlated with pay satisfaction. This result confirms that perceived value of money does act as a moderating variable in the income distribution model of the organizational sample. In addition, discussion and implications of this study are elaborated.
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... The main discouraging factor at work was related to low salaries and contractual employment, whereas stable jobs and higher incomes acted as a major motivating force among employees. This supports the findings of a previous study by Azman et al. (2009) that showed that money is a major driving force for the improvement of work performance. The present study showed that annual income significantly influences the job performance of employees. ...
Purpose
Extensive work related to examining predictors and determinants of employee engagement and job performance have been conducted in past studies. A dearth of studies relating organizational culture and employee engagement with contextual and task performance in the hospitality industry necessitated the present study. This study aims to examine variability in the task and contextual performance owing to employee engagement and organizational culture.
Design/methodology/approach
The study has been conducted in four districts of Himachal Pradesh using a multistage sampling technique. A total of 360 hotel employees were involved in collecting their responses through a structured questionnaire.
Findings
The results of multiple regression showed that vigor, dedication and absorption variables of employee engagement contribute toward contextual performance. Vigor and absorption affect the task performance of employees. In the case of contextual performance vigor shows maximum contribution followed by absorption and dedication whereas for task performance, the maximum contribution is exhibited by absorption followed by vigor. Organizational culture sub-variables of experimentation, autonomy and trust came out to be major predictors, which help to improve contextual and task performance of employees.
Practical implications
The study suggests that psychological ownership, along with trust toward top management can create an enriched work culture, which influenced both the contextual and task performance of employees. The findings of the study can be practically used by government and private organizations for improving workforce performance in the hospitality industry. Future research can be conducted based on the findings of the study.
Originality/value
The study provides insight on how and to what extent cultural and employee engagement variables can affect employee’s contextual and task performance. The present study adds value to the existing literature and investigates the role of culture and employee engagement in enhancing task and contextual job performance. Managers and policymakers can use the findings of the study to improve organizational culture, employee engagement and performance of the employees in the hospitality sector. The study opens avenues for future studies.
... The main discouraging factor at work was related to low salaries and contractual employment, whereas stable jobs and higher incomes acted as a major motivating force among employees. This supports the findings of a previous study by Azman et al. (2009) that showed that money is a major driving force for the improvement of work performance. The present study showed that annual income significantly influences the job performance of employees. ...
Purpose
Improving employee’s performance has always remained an area of concern in the hospitality industry where employees’ performance is related to customers’ satisfaction. The inadequacy of research work on demographics and organization variables’ influence on contextual and task performance has led to present research. Thus, the purpose of this study is to identify role of demographic and organizational variables in affecting contextual and task performance of hotel employees.
Design/methodology/approach
Data was collected from a sample of 350 hotel employees. The research is based on primary data and a structured questionnaire.
Findings
Task performance of employees increases with the age but contextual performance improves up to 40-50 years and then remains constant. Low salaries and job insecurity affected the performance of employees. A change of designation alone, without a corresponding increase in pay, did not enhance the performance of the employees. The type and size of the organization significantly affect job performance.
Research limitations/implications
The study is a contribution to the theory and practice of employee management and improving employee’s performance. Factors affecting contextual and task performance have been identified. Future research can be conducted based on this study.
Practical implications
The study has highlighted the significant effect of demographic variables, organizational variables on contextual and task performance of hotel employees. The hotel industry plays an important role in economic development of a country. The study is practically helpful for hotel industry to understand what demographical and organizational variables can be considered to enhance employee’s performance.
Originality/value
Previous literature has lacked in identifying factors, which can affect the contextual and task performance of hotel employees. The paper is contributing to the existing body of knowledge related to employees’ performance. The managers of hotel industry can use outcome of this research to improve job performance of the employees. Findings open new avenues for future research.
... The main discouraging factors were related to low salaries and difficult working conditions. A study done by Dieleman et al. (2013) was then supported by a study completed by Azman et al. (2009) where money acts as a moderating variable in the relationship between income distribution and pay satisfaction in the studied organization thus it will drive to better work performance. Monthly income is indeed an important motivator for work performance. ...
Work performance has been identified as the significant key for organizations to gain competitive advantage and superior productivity. This study determined the relationship between professional characteristics and job performance of employees at the DPWH in the Province of Iba, Zambales. It utilized the descriptive-correlational design to gather pertinent data on the performance and characteristics of the employees during the specified time frame through documentary analysis. The data were analyzed using Percentage, Mean and Pearson Product Moment Correlation. The majority of the employees were graduates of BSCE and other courses such as BSGE, BSArch., BSIE, BSCS, BSA, and BSBA; with varying levels of position, length of service and salary grade. A greater number of employees was with "Very Satisfactory" performance followed by those with "Satisfactory" performance rating. Educational background, length of experience, salary and positions held by an employee were tested as predictors of high performance. Thus, the HR managers may consider these variables in hiring and motivating public service employees
... The main discouraging factors were related to low salaries and difficult working conditions. Study done by Dieleman et al. (2003) was then supported by a study completed by Azman et al. (2009) where money acts as a moderating variable in the relationship between income distribution and pay satisfaction in the studied organization thus it will drive to better work performance. Job position is another variable that has been studied beside gender, age, income and education level. ...
The purpose of the study was to determine the effects of extrinsic motivation on employee performance in medium class hotels in Kisumu city, Kenya. The specific objectives of the study were to examine the effects of working conditions, incentives and interpersonal relations on employee performance. The study adopted survey research design. The target population was the employees in medium class hotels. Simple random sampling and stratified sampling were used. Questionnaires were the research instruments used. Descriptive and inferential statistics (Pearson product moment and multiple regression) were used to analyze data. Results revealed that there is no single set of extrinsic motivation that leads to effective performance and, therefore, combinations of extrinsic motivation are required to ensure effective performance. It may also be concluded that improved extrinsic motivation significantly (P=0.05) improves employee performance at work especially in medium class hotels. This implies that managers should increase extrinsic motivation to increase employee performance.
... The main discouraging factors were related to low salaries and difficult working conditions. Study done by Dieleman et al. (2003) was then supported by a study completed by Azman et al. (2009) where money acts as a moderating variable in the relationship between income distribution and pay satisfaction in the studied organization thus it will drive to better work performance. Job position is another variable that has been studied beside gender, age, income and education level. ...
Work performance has been identified as the significant key for both manufacturing and service industries/or organizations to gain competitive advantage and superior productivity. Although competitive advantage is more relevant to private sector, it can be extended to public sector by including ‘serving the public’ because it is the ultimate objective of the public sector The purpose of the study was to determine the effects of personal characteristics on employee performance in medium class hotels in Kisumu city, Kenya. The specific objectives of the study were to examine the effects of age, gender, marital status, education level, job title, years worked, job status and salary scale on employee performance. The study adopted survey research design. The target population was 187 employees in medium class hotels. Simple random sampling and stratified sampling were used for this study. Questionnaires were used as research instruments. Descriptive and inferential statistics (ANOVA and Chi square) were used to analyze the data. From the ANOVA and Chi square results, it indicates that that there is significance difference between age, gender, marital status, education level, job title, years worked, job status and salary scale on employee performance (P=.005). The management should monitor individual changes in personal characteristics to ensure they are nurtured inline with performance.
... The main discouraging factors were related to low salaries and difficult working conditions. Study done by Dieleman et al. (2003) was then supported by a study completed by Azman et al. (2009) where money acts as a moderating variable in the relationship between income distribution and pay satisfaction in the studied organization thus it will drive to better work performance. Job position is another variable that has been studied beside gender, age, income and education level. ...
Work performance has been identified as the signifi cant key for organizations to gain competitive advantage and superior productivity. Thus, this stud y intends to discover what exactly affect work perf ormance among employees of government agriculture agencies in Malaysia. A total of 180 employees were selected as the respondents for this study. The respondents wer e chosen from ten government agriculture agencies i n Malaysia. From the ANOVA and independent t-test conducted, type of residential house was found to have significant difference with work performance while Pearson Correlation employed indicated that age, wo rking experience and gross monthly salary has significant and positive relationship with work performance.
Recently, the hospitality industry has become the central point for academicians to develop conceptual as well as practical approaches especially related with employees. In fact, employees have capabilities to turnaround this industry in a volatile business environment. Previous researches have struggled to comprehend how engaged workplace culture affects the hospitality section's ability to function in various contexts and on various tasks. Thus, the presnt study is to examine the factors that predict an engaged organizational culture and how engaged culture affects employees' performance in the hospitality sector. The study was conducted using a sample of 350 frontline employees from various hotels and data was collected using a structured questionnaire. The findings reveal that the factors of engaged organizational culture that influence employees' contextual and task performance include vigor, absorption, trust and experimentation. The results indicate a positive relationship between engaged organizational culture and job performance, with engaged organizational culture being a significant predictor of job performance. The findings suggest that organizations in the hospitality industry should focus on developing an engaged organizational culture to improve job performance and overall business outcomes. The study surface that organizations should strive to create a work environment that promotes engagement, motivation, and job satisfaction among their employees. Overall, the study provides valuable insights for managers and policymakers in the hospitality industry who are looking to improve organizational performance and enhance employee well-being. The study suggests future research avenues to improve the effectiveness of the hospitality sector.
[Opinion] Money matters in the workplace, no matter what kind of work people do. Money motivates us, and companies would be much more effective if money were accepted as the powerful motivator it is. While several studies demonstrate that financial incentives generate better employee performance, financial incentives can be misused and should not be seen as a panacea. Financial incentives should be used thoughtfully, with careful planning and attention to the potential abuses inherent in these systems.
The purpose of this study was to investigate the role that perceptions of equity and justice play in sales force commitment to the organization and intent to turnover. The sample chosen for the present analysis were outside salespeople. Results indicated that facets of both internal and external equity were significant factors in explaining organizational commitment and intent to turnover. And, contrary to previous fmdings (Folger and Konovsky and 1989; McFarlin and Sweeney 1992 and others), distributive justice was more important to organizational commitment and intent to turnover than procedural justice. The above findings have important implications for sales force management and future research endeavors.
Distributive justice was found to be a more important predictor of two personal outcomes, pay satisfaction and job satisfaction, than procedural justice, whereas the reverse was true for two organizational outcomes-organizational commitment and subordinate's evaluation of supervisor. However, procedural and distributive justice also interacted in predicting organizational outcomes. We discuss limitations of this study and directions for future research.
Several researchers have suggested that females are less sensitive than males to conditions of salary underpayment and have coined the term paradoxical female. To test the hypothesis addressing the paradoxical female and to examine reactions of females and males within competing models for pay satisfaction, a random sample of chief financial officers was selected and assessed. Results indicate that female chief financial officers, unlike male chief financial officers, receiving less than their entitled salaries enjoyed the same level of pay satisfaction as both female and male chief financial officers receiving more than their entitled salaries. Pay satisfaction, as defined by a referent source, was found to vary by gender of chief financial officers and to follow a linear, as opposed to a curvilinear, model.
We conducted a survey across a two-year period to examine the attitudinal effects of skill-based pay (SBP) plans in a consumer products company in the Northeast region of the United States. We examined the relationship between SBP plan characteristics and employees’ evaluation of (and reactions to) the pay system; fairness perceptions were considered as the explanatory mediating variable. The results demonstrate that SBP plans, which provide training and are better understood and communicated, will lead to an increased general perception of fairness which, in turn, will lead to more positive evaluations of the plans a year later. Implications for the relationships between fairness perception and pay system design are discussed.
The present study was guided by the general hypothesis that pay satisfaction is multidimensional. The Pay Satisfaction Questionnaire (PSQ) was developed to assess five dimensions of satisfaction with pay (level, benefits, raises, structure, and administration). Results on two heterogeneous samples of employees provided support for the multidimensional hypothesis, although a four-dimensional solution (level, benefits, raises, structure/administration) provided better representation of the variance in the items studied. These four scales showed high internal consistency reliabilities. Comparison of the pay scales of the Job Descriptive Index and Minnesota Satisfaction Questionnaire with the PSQ dimensions suggested that these well-known scales primarily measure satisfaction with pay level. Implications of the findings for pay satisfaction research, both substantive and measurement oriented, are discussed.
© 1985 International Union of Psychological Science.
This study examines the love of money and work-related attitudes and identifies four money profiles based on a sample of citizens in the Republic of Macedonia. Achieving Money Worshipers (the highest scores on Factors Success, Motivator, and Budget and the lowest on Evil) had the highest active involvement in work activities. Careless Money Admirers (the lowest score on Factor Budget) had the highest external locus of control, the highest involvement, and lowest success avoidance. Apathetic Money Managers (the lowest scores on Factors Success and Motivator) had the highest internal locus of control and the lowest involvement. Money Repellent Individuals (the highest score on Factor Evil) had the lowest competitiveness and the highest success avoidance. Results provide the validity of the Love of Money Scale and the four money profiles.