ORGANISATIONAL

BEHAVIOUR
PROJECT

Relationship between Pay

And Job Satisfaction

Group members
Samarth Jude Choudhury-224036
Karen J Kurian-224045
Ujjwal Bansal-224073
Sharon Shaji-224025
Natasha Raisanghani-224063
Aarish Khan-224067
 REPORT

The aim of this research paper is to find the relationship between the
salary received by an employee and his level of job satisfaction
through primary and secondary research. The data analysed by us in
the secondary research is discussed in the literature review. Our
group had circulated a survey to capture the primary data, to study
the association between the two variables.

Introduction
Employee’s role is important in all positions in the service industry.
Especially, reinforcing the competitiveness of human resources in
the healthcare industry that is labour intensive and technology
intensive is quintessential (Kim, Park & Lee, 1997). Unfortunately,
management activities to improve health system functioning are not
as effective and efficient as in other sectors of the economy. Such
poor performance is attributed to very high weight assigned to
medical or clinical processes of service providers, namely the
doctors and much lower weight assigned to management,
management approaches and implementation of effective
administrative instruments. Underperformance is also attributable to
the characteristic of organisations composed of various occupation
types riddled with complex motivation which makes it harder to
control and manage health care organisations (Kim et al., 1997;
Chang, Lee, & Kim, 2006). Health care industry is experiencing rapid
changes on a continuous basis due to a number of underlying
factors changing constantly, often at quite rapid rates. A number of
research studies have been carried out to understand the links
between wage and job satisfaction,
Objectives of the research
Employee’s role, satisfaction and pay is important in all positions in
the service industry.

· The objective of this research paper is to study the relationship

between pay and job satisfaction of employees working in various
sectors and of various demographic segments.

· The result of principal factor analysis showed that pay

satisfaction consists of 3 factors which are ‘paying system’, ‘pay
level’, and ‘benefits’. ‘Pay raise’ which was one of 4 factors of the
original PSQ was not the factor of pay satisfaction of employees.

· The survey was conducted on 86 people, of various income

groups. The sub-factors of job satisfaction based on previous
studies were divided into ‘jobs’, ‘wages’, ‘promotion
opportunities’, and ‘supervision’.

Compensation level and system have significant impact on the

livelihood and quality of life of the labour force in the industry as
well as overall social status of the workforce with implications for
performance in job settings through the effect of the compensation
system on motivation of employees. Wage is the most important
category as monetary compensation in an organisation and one of
the most fundamental elements for inducing positive motivation
among members of the organisation. Compensation system,
especially the monetary compensation part of the total wage bill,
has important behavioural influence on organisation members and
has become the standard for evaluating organisation’s management
practices.
RESEARCH METHODOLOGY

Methodological approach

This research paper examines the relationship between Pay and Job
Satisfaction. Qualitative and Quantitative information were collected from
individuals working in different industries.

Data Collection Methods

We used Google forms to gather data and sent it to our friends, family and
linkedin connections. The survey consisted of 3 multiple-choice questions and
11 likert scale responses. The aim was to conduct the survey with 50
employees with different pay, city and age. Probability sampling method was
applied and we received almost 80+ responses.

Methodological responses

Google Forms was the most appropriate, well-liked, user-friendly, and

accessible option, so we went with it. Other approaches, such as doing
in-person interviews, were insufficient because they were impractical and we
were under a time crunch. There might have been fewer responses if we had
conducted in-person interviews for the project.

Motivation for taking these factors in the survey

· Age

Age has a significant impact on job satisfaction since older workers, those 50
years or older, may be happier with their salary because they may not have
as many responsibilities as younger workers, those 23 to 50 years old.

·
 City

The cost of many goods and services varies from location to location. For
instance, someone who lives in Mumbai may be less satisfied with their pay
than someone who lives in Lucknow because house rents in Mumbai are
significantly higher than they are in Lucknow, meaning the person employed
in Mumbai may have to spend a significant amount of money just to pay the
rent.

· What is your annual pay?

Because monetary incentives are known to encourage and elevate people,

salary is one of the important factors when it comes to job happiness.

For convenience, we had price ranges of less than 5 lakhs, 5–10 lakhs, 10–25
lakhs, 25–50 lakhs, and more than 50 lakhs.

· How satisfied are you with your current pay?

Another key variable in our research was job satisfaction. We needed to know
how satisfied employees are with their current salary.

· Do you agree that your company pays you well according to the
market conditions?

Because the employee is aware of the market conditions and the

remuneration they are entitled to as a result, we have included a likert scale
to use for responding, ranging from strongly disagree to strongly agree.

· How would you rate your company on the basis of monetary

benefits offered by them?

Other than pay, monetary benefits like overtime allowance, entertainment

allowance, city compensatory allowance, meal allowance, house rent
allowance and medical allowance are also provided by some organisation
which directly affects the job satisfaction as it is more or less like their play.

· How would you rate your company on the basis of non-monetary

benefits offered by them?

Non-cash perks are things the employer gives its staff members in exchange
for their services. Benefits including expressions of gratitude, workplace
flexibility, experimental rewards, and professional and personal development
training also have an impact on job happiness.

· How satisfied are you with the increments in pay received by you
in the past?

Including increments in pay received by them in the past in our survey

helped us to compare the current and past satisfaction level.

· How would you rate the degree of influence your supervisor has on
your pay?

There is a potential that a supervisor will threaten to withhold future raises

because to a personal beef, which will have an impact on the employee's
compensation and level of job satisfaction.

· What do you expect from your organisation with respect to future

income increments?

An employee won't be as happy if they don't see their employer growing in

the future and it will directly affect job satisfaction.

· How punctual is your organisation in the payment of salary?

Job satisfaction is significantly impacted by the timing of the company's

payment of wages to its employees. Delay in payment may cause
disappointment, while prompt payment may lift their spirits.
GENDER

Gender also affects the relationship between pay and job satisfaction,
through our survey we found out that men with a high salary are more
satisfied with monetary and non monetary benefits received by them and
also reported that their supervisor’s influence over their salaries is minimal.
Males in the high income bracket mostly expect high increments in income,
generally over 20%+, they would rather have a role more preferred for less
money than an unpreferred role for more money, they would be highly
dissatisfied if their colleagues got an increment before them. Males with a
lower salary(below 10 lakhs) were moderately satisfied with their pay, but
surprisingly agreed that the organisation paid them will according to the
industry standards, they were moderately satisfied with the monetary
incentives but were dissatisfied with the non monetary incentives received by
them, males with a lower salary also reported that their supervisors had high
influence over their, the expected increments varied between 5-20%, they
were moderately satisfied with their most recent increments and it was also
found that they would rather work for more money in an unpreferred role
than less money for a preferred role. They would also be highly dissatisfied if
their colleague got more money over them.
Females with a high remuneration reported high satisfaction with their
salaries and also agreed that they were being paid well according to the
market standards, they were moderately to highly satisfy with monetary and
non-monetary incentives. They also reported that their supervisor had high
influence over their salaries, the expected increments ranged from 10-30%+
and they were also satisfied with their previous increment, they would also
prefer money over their preferred job roles and would be highly dissatisfied if
a colleague got an increment and they did not.
Females with low remuneration reported to be very dissatisfied with their
pay and felt that their company did not pay them well according to market
standards and that the monetary and non-monetary benefits received by
them were below par as well, supervisors had moderate influence over their
salaries, the increments expected by them were over 30%+, they also
reported to be dissatisfied with their increments, they would rather work for
more money than in a role preferred by them and would also e dissatisfied
immensely if their colleague got an increment before them.

PAY

People in the pay slab of 5-10 lakh, were satisfied with their remuneration,
they were satisfied with their monetary benefits but felt that the
non-monetary benefits received by them were inadequate, delay faced by
people in these slabs in the payment of their salaries was minimal, they were
moderately satisfied with their past increments, they would also prefer to
work for less money for a more preferred role. They also reported that their
supervisors had a high influence over their salaries.
People in pay slab of 10-25 lakhs, they were moderately satisfied with their
current remuneration, they were happy with their pay according to the
current market conditions, they reported that their supervisor’s influence
over their salaries was minimal, their organisations were punctual in the
payment of their salaries, highly dissatisfied if their coworkers got a higher
salary. Expected increments in this slab ranged from 10-20% and were
neutral about their most recent increments.
People in the pay slab of 25-50 lakhs were very satisfied with their current
pays and monetary or non monetary benefits. They reported that their
supervisor had a high influence over their salaries, they stated that they
would prefer money over a preferred job role. Their expectations for future
increments ranged from 5-15%, they were also happy with respect to the pay
received by them according to the current market conditions, they would be
highly dissatisfied if their co-worker gets a higher salary than them.
People who received a remuneration of more than 50 lakhs were highly
satisfied with current pay received by them and were neutral about their pay
according to current market situations, they were very satisfied with their
past increments, neutral about the influence that their supervisor had over
their salaries, satisfied with the punctuality of payment of salaries, their
expectations for future increments ranged from 10-20%, they would prefer
more money over a preferred role in an organisation, they would be highly
dissatisfied if their co-worker received a higher salary than them.

AGE
20-25

Expected increment of 20% - 30%. Highly satisfied with current pay and
monetary benefits. Highly dissatisfied with the supervisor's influence on
work. Satisfied with the punctuality. Past increments were highly satisfactory.
They are willing to work for lesser salaries for a better role. If their co-worker
receives an increment higher than theirs, they would be highly dissatisfied.

25-30

People are highly unsatisfied with their current pay because the monetary
and non-monetary benefits received are underwhelming. They expect a
future agreement of more than 20%. They would prefer more money than a
better job role. Highly demotivated when their peers receive an increment.

30-40

They are satisfied with their current pay according to the market conditions.
As far as monetary and non-monetary benefits are concerned, they have a
neutral view. Highly satisfied with their past increments. They do not have a
strong opinion over the influence their superior has over the work they do.
Expected future increment is 10% -20%. It is highly probable that they would
prefer working for more money even if the job assigned is not to their liking.

40-45

They are mostly satisfied as they receive ample monetary as well as

non-monetary benefits. Past increments indicate positive attitudes among
people. They do not have a strong opinion over the influence their superior
has over the work they do. They would work for lesser wages or salaries if
they get their preferred job role. They would be highly dissatisfied if their
co-worker received a higher package.

50-60

They are satisfied with their current pay but not so much with the prevailing
market conditions due to the fear of the youth entering the business domain.
The are highly satisfied with the non-monetary benefits they receive and
therefor are willing to work even if their salaries are reduced. They expect an
increment of less than 10%.

20-25

Expected increment of 20% - 30%. Highly satisfied with current pay and
monetary benefits. Highly dissatisfied with the supervisor's influence on
work. Satisfied with the punctuality. Past increments were highly satisfactory.
They are willing to work for lesser salaries for a better role. If their co-worker
receives an increment higher than theirs, they would be highly dissatisfied.

25-30

People are highly unsatisfied with their current pay because the monetary
and non-monetary benefits received are underwhelming. They expect a
future agreement of more than 20%. They would prefer more money than a
better job role. Highly demotivated when their peers receive an increment.

30-40

They are satisfied with their current pay according to the market conditions.
As far as monetary and non-monetary benefits are concerned, they have a
neutral view. Highly satisfied with their past increments. They do not have a
strong opinion over the influence their superior has over the work they do.
Expected future increment is 10% -20%. It is highly probable that they would
prefer working for more money even if the job assigned is not to their liking.

40-45

They are mostly satisfied as they receive ample monetary as well as

non-monetary benefits. Past increments indicate positive attitudes among
people. They do not have a strong opinion over the influence their superior
has over the work they do. They would work for lesser wages or salaries if
they get their preferred job role. They would be highly dissatisfied if their
co-worker received a higher package.

50-60

They are satisfied with their current pay but not so much with the prevailing
market conditions due to the fear of the youth entering the business domain.
They are highly satisfied with the non-monetary benefits they receive and
therefore are willing to work even if their salaries are reduced. They expect
an increment of less than 10%.

Literature Review

1)

Relationship of Pay and Job Satisfaction

Martin Serreqi

Department of Management, Faculty of Economy, University of

Tirana

European Journal of Marketing and Economics

July - December 2020 Volume 3, Issue 2

ISSN 2601-8667 (Online)

The study measures the relationships of pay satisfaction and its

dimensions (pay level, benefits, pay raises and
administration/structure) with job satisfaction. A total of 200 public
sector employees, from different companies and non-governmental,
independent institutions participated. The results showed that
overall pay satisfaction and pay level affected job satisfaction while
pay raises, benefits and administration/structure did not. The results
and limitations of the study were discussed and suggestions on
future research were given.

The study discovered that not all dimensions of pay satisfaction

were related with job satisfaction. Overall pay satisfaction and pay
level were related to job satisfaction while pay raises, benefits and
administration/structure were not. The relationships of pay and pay
level satisfaction with job satisfaction were expected considering
empirical studies and the lack of relationships for the other three
dimensions can be explained with the context in which the study was
conducted. Organisations in the public sector might offer benefits of
lesser value and number because of budgetary constraints.

To analyse the nature of the relationships between pay satisfaction

and its dimensions of pay level, benefits, pay raises and
administration/structure with job satisfaction we use the Chi Square
Independence Test.

2)

ASSOCIATION BETWEEN JOB SATISFACTION AND PAY: THE CASE

OF THE WAGE PAYMENT SYSTEM OF DENTAL CLINICS IN KOREA

Eui Jeong Kim

University of South Carolina 2017

The purpose of this study is to investigate the empirical type of the

wage structures and the sub-items of wage applied at dental clinics
and to analyse the determinants of pay satisfaction of dental
employees. The questionnaire used in this study consists of personal
characteristics, characteristics of the workplace, administration of
pay, Pay Satisfaction Questionnaire (PSQ), Job Descriptive Index
(JDI). PSQ and JDI were translated, and backward translation into
Korean was implemented

The fact that they preferred a physical training allowance indicates

a changed value of modern people who attach great importance to
the quality of life; the surveys in the past showed most workers
prefer an allowance related to the basic necessities such as food,
clothes, and shelter. It was also revealed that they prefer a regular
bonus, rather than a special-purpose one as they want to pursue a
stable and comfortable lifestyle. Benefits mean that every type of
cash and wage in kind, other than the actual wage, are provided to
advance the standard of living of the employees and their families

n. In order to boost the wage and job satisfaction of those working

in dental clinics and thereby to make them provide quality medical
services to patients, their wage satisfaction should be achieved first.
Conventional approach to wage satisfaction was by driving up the
wage level as the employees used to be concerned mainly about the
necessities of life such as food, clothing, and shelter. Now, it is a
different story; the changed values of modern people who want to
pursue a more stable and comfortable life, unlike the past, should be
reflected. That is why paying attention to the wage management
system is required. As shown in the results of this study, it is
necessary to review other types of wage payment methods (e.g.
wages based on job function or wages based on job evaluation),
rather than the existing basic salary system. Even in the allowances
and bonuses, the types and characteristics of dental clinics can be
reflected. In effect, continuous efforts should be made to manifest
the value pursued by the organisations through the wage system.
This approach requires not only efforts by individual dental clinics
but also a move by the dental community as a whole. In other
words, intervention and attention from the Korean Dental
Association will be needed for a systematic job analysis that must be
preceded for an efficient human resource management

3)
The relationship between pay and job satisfaction: A meta-analysis
of the literature Timothy A. Judge , Ronald F. Piccolo , Nathan P.
Podsakoff , John C. Shaw , Bruce L. Rich

Received 11 March 2010

Available online 13 April 2010

The current study used meta-analysis to estimate the population

correlation between pay level and measures of pay and job
satisfaction. Cumulating across 115 correlations from 92 independent
samples, results suggested that pay level was correlated .15 with job
satisfaction and .23 with pay satisfaction. Various moderators of the
relationship were investigated. Despite popular theorising, results
suggest that pay level is only marginally related to satisfaction.
Theoretical and practical implications of the results are discussed.

pay level is more strongly associated with satisfaction with pay than
the job overall. Relationships between pay level and both job and
pay satisfaction were unaffected by the type of pay measure
assessed (exact or interval), independence of data source,
publication status, or rank of journal source

The result for pay satisfaction is particularly surprising. One might

argue that pay level is weakly related to overall job satisfaction
because, of the facets of job satisfaction, pay is not as important as
other facets such as work satisfaction (Judge & Church, 2000).
However, when pay level bears only a slightly stronger relationship
with pay satisfaction than with overall job satisfaction, such an
argument is not plausible. Past qualitative reviews have suggested
that pay level is a strong predictor of pay satisfaction (Heneman,
1985). The results of this review—the first quantitative review to
appear in the literature—suggests that earnings are only weakly
satisfying to individuals even when they confine their satisfaction to
an evaluation to their pay

This study has implications for employees and employers. For the
employee, if the ultimate goal in a job is to find one that is
satisfying, given a choice, individuals would be better off weighing
other job attributes more heavily than pay. For example, intrinsic job
characteristics—even when objectively measured (via job
complexity)—better predict job satisfaction than, apparently, does
pay (Judge & Church, 2000). Moreover, although individuals often
cannot choose their leaders, leadership behaviours such as
consideration (Judge et al., 2004) display non-trivial correlations
with job satisfaction. Further, when individuals are asked what would
most improve the quality of their lives, the most common response is
a higher income (Campbell, 1981). Yet if job satisfaction can be
equated with the perceived quality of one's job, then our results
suggest that many employees are mistaken about what would
improve the perceived quality of their work life

The results suggest that, within-studies, level of pay bears a positive,

but quite modest, relationship to job and pay satisfaction. Between
studies, there also is little relationship between average pay in a
sample and the average level of job or pay satisfaction. Future
research could build on these results by testing theoretical
mechanisms that may explain why that which so motivates us has
such little potential to satisfy

The purpose of this research is to develop the conceptual model

between pay and job satisfaction in business organisations. Past
literature reflects that pay plays a very important role in every
business organisation. By analysing the past literature this study
reflects that there is a positive impact of pay on job satisfaction.
4)

Impact of Pay on Job Satisfaction in Business Organizations

Ali Raza & Muhammad Shoaib Khan

Mediterranean Journal of Basic and Applied Sciences (MJBAS)

Article Published: 10 July 2019

The purpose of this research is to develop the conceptual model

between pay and job satisfaction in business organisations. Past
literature reflects that pay plays a very important role in every
business organisation. By analysing the past literature this study
reflects that there is a positive impact of pay on job satisfaction.

Most of the past research found a relationship between pay and job
satisfaction in business organisations. (Ganguli, 1957) act tricky in
relationships in business organisations towards pay and various
areas of satisfaction, Job Satisfaction with pay has legal association
towards age, gender, income level, occupation, and other
demographic characteristics controlled by business organisations.
Larger amount of pay is paid to the top executives and they are fully
satisfied with that which they receive. The top level managers who
has very good knowledge and possess higher education, trainings,
certifications are low satisfied from their pay (Klein and Maher,
1966) Hierarchy organisations and amount of pay are directly
interlink with managers (Henry, 1963) attendant with humble
satisfaction with pay that should be derived from higher education
5)

Job Satisfaction, Gender and Salary: A Study on Correlation

THE BATUK : A Peer Reviewed Journal of Interdisciplinary Studies

Vol. 5 Issue No.1

Jan. 2019

ISSN 2392-4802

Rocky Maharjan

Nesfield International College Lecturer

This research tries to study the level of job satisfaction on the basis
of gender and their salary among college teachers of Lalitpur
district. This survey research was conducted upon 122 (male 72 and
female 50) respondents by using The Minnesota Satisfaction
Questionnaire (MSQ). Result of the study shows male respondents
were earning more than female respondents. Male respondents are
more satisfied than female. The job satisfaction is positively
correlated to salary

In conclusion, the results of the present study indicate that Job

Satisfaction was a measurable and influential construct among
teachers teaching in Bachelor level of education, which is influenced
by salary. The impact of Salary on Job Satisfaction is positively
related among Teachers teaching on Bachelor Level. For better Job
Satisfaction among their teachers, the educational institute should
reward them with a competitive level of Salary and other facilities
since the teaching profession is a prestigious occupation. The
perspective of teachers' experience in their occupation also plays an
important role in determining income ranges, job satisfaction and
organisational citizenship behaviour among the teachers. The
findings of the current study encourages further research on years
of experience, perceived leadership style, rewards and
organisational commitment on Job Satisfaction and Organisational
Citizenship Behavior among teachers teaching on any level of
education. Thus, this finding helps as a guideline for human resource
management and managers to review when they demand high
performance and commitment in their institute.

6)

Inequality at Work: The Effect of Peer Salaries on Job Satisfaction

David Card

Alexandre Mas

Enrico Moretti

Emmanuel Saez

AMERICAN ECONOMIC REVIEW

VOL. 102, NO. 6, OCTOBER 2012

(pp. 2981-3003)

A randomly chosen subset of University of California employees was

informed about a new website listing the pay of University
employees. All employees were then surveyed about their job
satisfaction and job search intentions. Workers with salaries below
the median for their pay unit and occupation report lower pay and
job satisfaction and a significant increase in the likelihood of looking
for a new job. Above-median earners are unaffected. Differences in
pay rank matter more than differences in pay levels.

The information treatment has a negative effect on workers paid

below the median for their unit and occupation— particularly for
those in the lowest pay quartile—but has no effect on workers paid
above median. The evidence further suggests that the effect of the
treatment is more closely related to pay rank than to the actual level
of pay relative to the median in the pay unit. These patterns are
consistent with a utility function that imposes a negative cost for
having wages below the reference point, but little or no reward for
having wages above the reference point.

In terms of workplace policies, findings indicate that employers

have a strong incentive to impose pay secrecy rules. In the short run,
the disclosure of salary information results in a decline in job and
pay satisfaction, concentrated among the lowest-earning workers.
In the longer run, it is possible that making information on salaries
available may lead to endogenous changes in wage-setting policies.
 CONCLUSION
In conclusion, the report makes it clear that job satisfaction and pay
are closely linked. Job satisfaction is directly linked to pay but only till a
certain level, as we cannot state that very high income levels lead to
high job satisfaction because some respondents at very high income
levels were not totally pleased with their jobs, a woman earning 25-50
lakhs per annum had stated to be totally dissatisfied with her job due
to other reasons. In short, pay and job satisfaction are linked but we
also need to consider other factors which might affect job satisfaction
like age, gender, city of residence etc. as discussed above in the report.