Human Resource Management And Employee Business Essays

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Employee satisfaction in having their services compensated for is one of the important matters in human resource management of organizations. For, this matter has an important transitive and critical role in the organization compensating strategies and policies effecting the employees' behavior as well as views (Blau, 1994; Lawler, 1981; Sturman & Short, 2000). Despite numerous studies conducted regarding payment and salary satisfaction (Henneman & Judge 2000), not many practical studies have been conducted regarding the relationship between payment satisfaction and it's consequences (Derher et. al., 1998; Henneman & Judge, 2000; Faulk, 2000).

Pay satisfaction is an effect or positive feeling of people towards their received payment (Miceli &Lane,1991). Behind this simple definition different studies (Henneman, 1985; Henneman & Judge, 2000; Lane, 1991; Faulk, 2002) state a disagreement in the concept of this construct.

Some researchers believe pay satisfaction is a one-dimensional (Miceli, Near and Schwenk, 1991), while other researchers consider it a four-dimensional and some others a seven-dimensional (William et. al., 1999). While others believe that the number of dimensions regarding pay satisfaction depends on moderators such as cognitive complexity (Carraher & Buckley, 1996) and job classification (Scarpello, 1998; Faulk, 2002).

Many of the studies performed merely describe pay satisfaction or present its dimensions (Carraher, 1991; Henneman & Schwab, 1985; Mulvey et. al.,1992). Among the numerous studies, the place of a study investigating the consequences of payment or in other words evaluating a payment system through its effects and results stands empty.

Faulk (2002) has examined payment satisfaction consequences in a payment system from two dimensions. The first dimension consists of the outcomes focusing on employee's views and behaviors. The other dimension consists of the consequences focusing on the organization's views and behaviors (as a whole).The organization-focused consequences may consist of organizational commitment (both affective and continuance), turnovers and such matters. By organizational commitment, we mean the psychological situation, which links the individual to the organization (Lum et. al., 1998).

The views regarding the vocation and employee behavior are regarded as dimensions related to employees' personal features. The views related to the vocation are job satisfaction factor which indicates the amount of progress the employee shows within the necessary action (Welbourne et. al., 1998) and organization citizenship behavior which is directly focused on colleagues (Williams & Anderson, 1991).

On the other hand, pay satisfaction has exclusive effects on the feeling of organizational justice (Faulk, 2002). Different studies have shown a close relationship between the dimensions of pay satisfaction and the organizational justice. This has been investigated in many studies through satisfaction of payment system (Davis & Ward, 1995; Deleon & Marticchio, 1998; Scarpello & Jones, 1996). Organizational justice and fairness has been assessed through amount and the way they are paid. There is the possibility that pay satisfaction would affect the sense of just and fairness (Heneman & Judge, 2000; Moorman, 1991).

It is possible to divide the sense of organizational justice to two parts. Heneman and Judge (2000) believe that some aspects of pay satisfaction which are focused on consequences such as pay level satisfaction, payment (Salary) promotion, are related to distributive justice. While satisfaction factors with focus on procedures such as organizational structure and management are related to procedural justice.

The present research tempts to investigate pay satisfaction system in Atieh Hospital through studying the relations between employees' pay satisfaction with the consequences of such satisfaction, considering the role of organizational justice as the moderator. On the other word, the present study aims to respond to this fundamental question:

Firstly, how much is the satisfaction level of the employees regarding the organization's paying system? Secondly, does any significance relation exist between the level of payment satisfaction and the consequences of this satisfaction? Thirdly, how is the relationship between the organizational justice and the level of satisfaction?

1.3 Significance of the Study

This study has both practical and theoretical significance that relate to how organizational justice mediates the relationship between pay satisfaction and the outcomes of pay satisfaction in organizations.

There are decades that researchers have been studying the payment system and its foundations and the matter of pay satisfaction of the employees. The main reason for this interest is the behavioral consequences that pay satisfaction produces. As an example, the policies and the amount of salary and merits affect one's intentions of staying with a company or leaving it; as well as the individual's motives to follow the organization's intentions while performing the job.

Despite the numerous studies, which have been performed on pay satisfaction of employees, limited information has been achieved of the factors resulting to pay satisfaction. Pay satisfaction has an absolute as well as a proportional concept. Meaning, while people judge their payments they evaluate both its absolute amount and its proportional amount. The absolute payment is the gross income. The proportional payment is the payment compared to others like co-workers, colleagues and other employees in and outside the organization and the general living expenses, which is very complex and even complicated. This makes pay satisfaction a psychological as well as financial issue.

Noting here is that the employees believe compensating their services is due to their efforts or having performed a prominent task, while the employers consider it the revenue of their capital and most people interpret their service compensations with the salary they get for their job. This is one of the basic rules for service compensation in a system and unless carefully designed and performed, it will affect other recruiting sectors such as planning, training, promotion, etc.

A fair payment system is related to everything from job dissatisfaction to the intention of going on strike. A payment system also effects trainability, experience making, reduction in intent to turn over, service facilitation, promoting the services, reduction of complaints regarding the payments and also reduction of work obstacles due to payments.

Payments and salary have two dimensions. For the payee they are considered the income and for the employing companies and organizations, they are considered expenses. To adjust the needs of both employers and employees a structure attending the two dimensions is required.

Management professionals have two main theories regarding employee motivation: motivating factors which increase in sale and payment rather than a shift in position etc and inner motivating factors including the nature of the job, responsibility, opportunities, etc.

Creating coordination and harmony between the paying system characteristics and the individuals that the organization tends to absorb, train and keep is a necessity (Steers and Porter, 1987 p.355). It seems like studying and investigating on the sources available and also satisfaction of payment and salaries obtained by people in different jobs is of special importance for managers and people in charge of organizations.

1.4 Purpose of the Study

The purpose of this study was to gain a better understanding of the outcomes of pay satisfaction and the role of organizational justice on the consequences of pay satisfaction. The research objectives specifically include:

To determine the level of pay satisfaction amongst the personnel of Atieh Hospital.

To determine the level of the organization-focused consequences (including organizational commitment, intent to turnover), as well as job-focused consequences (including job satisfaction, organizational citizenship behavior and performance) amongst the personnel of Atieh Hospital.

To determine the level of the organization justice (including distributive and procedural justice) in the personnel of Atieh Hospital.

To determine if there are significant relationships between pay satisfaction and the consequences of pay satisfaction.

To determine if there are significant relationships between organizational justice and pay satisfaction

1.5 Research Hypotheses:

H1: There is a positive significant relation between the level of pay satisfaction and the consequences of pay satisfaction.

H1a: There is a significant relation between the level of pay satisfaction and the job-focused consequences of pay satisfaction (including job satisfaction, organizational citizenship behavior and job performance).

H1b: There is a significant relation between the level of pay satisfaction and the organization-focused consequences of pay satisfaction (including organizational commitment and intent to turnover).

H2: There is a positive significant relation between organizational justice and the level of pay satisfaction.

H2a: There is a significant relation between distributive justice and the level of pay satisfaction.

H2b: There is a significant relation between procedural justice and the level of pay satisfaction.

H3: There is a positive significant relation between organizational justice and the consequences of pay satisfaction (including job-focused and organization-focused consequences).

H3a: There is a significant relation between distributive justice and the consequences of pay satisfaction.

H3b: There is a significant relation between procedural justice and the consequences of pay satisfaction.

1.6 Conceptual Model

The following model demonstrates all the concepts, dimensions, factors, components, and the intended indexes in the study, the relationship between the factors and variables mentioned in the hypotheses:

Organizational justice


Job Performance


Org. Behavior Citizenship

Job Satisfaction

Intent to turnover

Pay level



Job Focused Conseq.

Org. Focused Conseq.

Distributive justice

Procedural justice

Satisfaction Consequence

Pay satisfaction

1.7 Research method

The approach of this study is applied research since it is about to develop the applied knowledge in a particular field and conducted to resolve the consequences of pay satisfaction and the effect of organizational justice on the level of pay satisfaction and its consequences in the Atieh Hospital via the findings. A quantitative research method utilized to measure the level of pay satisfaction, organizational justice and the consequences of pay satisfaction.

1.8 Limitations of the Study

Limitations impacted this study in certain aspects. Several assumptions and limitations related to the scope of the study as well as to the methodology.

More research must take place on pay satisfaction and consequences of pay satisfaction. The purpose of this study was to determine if relations between pay satisfaction and satisfaction consequences exist in terms of the level of organizational justice in the workplace; therefore, the role of other possible variables was not examined.

This study was focused on one particular organization (i.e. Atieh Hospital) and sample size which restrict the survey. The results may or may not apply to other organizations and this has an impact on external validity.

Another limitation is the use of questionnaire as the main instrument. Although the quantitative data were gathered, they were not systematic. There are always limitations in using such instruments.

Respondents could have had biased or unresponsive opinions based on the structure of the survey. The data collected was self reported. The respondents may have different perceptions with respect to survey questions.

Incorporating qualitative research techniques such as case studies and anecdotal reporting could improve consistency in future studies.

1.9 Definition of variables and Key Terms

Independent Variables

Pay satisfaction is independent variable in this study. It is necessary to keep in mind that pay satisfaction has different aspects. Pay satisfaction includes pay level; pay raise, benefits, organizational structure, etc.

Pay satisfaction is the amount of satisfaction in each individual from the salary and all payments received due to performing his/her job. The satisfaction rate is evaluated by using the PSQ (Pay Satisfaction Questionnaire).

Pay Level Satisfaction is the average expenses paid for a job within a society's supply and demand. Pay satisfaction is also mentioned in the pay questionnaire.

Pay raise Satisfaction is the individual's satisfaction in the changes made in his/her salary (Henemann and Schwaub, 1985).

Dependent Variable

Consequences of Pay Satisfaction: is considered as dependant variable. These consequences consist of organizational-focused consequences (organizational commitment and intent to turnover) as well as job-focused consequences (job satisfaction, organizational citizenship behaviour and job performance).

Organizational commitment: is an outlook on the fidelity of the employee regarding the organization and is a constant process of people's participation in organizational decision-making, attention to the organizational success and welfare. The organizational commitment is a psychological state, which links the individual to the organization (Allen & Mear, 1990).

Intent to turnover: states the individual's intentions to leave the organization (Faulk, 2002).

Job Satisfaction: is the extent of the individual's positive feelings and outlooks towards the job. According to Locke (1979) job satisfaction is a pleasant or positive excitement that is produced by individual's gaining experience, and progress in one's position (Faulk, 2002).

Organization citizenship behavior: Organ (1988) describes organization citizenship behavior as a behavior depending on one's free will (expediency) that is not detectable directly and blatantly by the organization but helps the organization's beneficial performance. Bateman and Organ(1983) who first created the term organization citizenship behavior practically described it as: Positive active participation such as punctuality and being on time further than what is regarded as discipline; and eradicating other colleagues' harassment such as complaining or accusing each other over minor problems (Markoczy & Xin, 2004).

Job Performance: Likert (1963) believes job performance is individual's successful performance of tasks according to the organization's expectations (Faulk, 2000).


Organizational Justice: In this research, both distributive and procedural justice is considered as the mediators.

Organizational Justice: is the feeling of fairness that the employees have when encountering the organization (Cropanzano & Greenberg, 1997).

Distributive Justice: is the fairness and justice employees feel when receiving any results from the organization (Folger & Gropanzao, 1998).

Procedural Justice: Feeling of justice with the processes and trends which the organization policy making is based upon (Greenberg,1990).