Relationship between Performance Based Pay, Interactional Justice and Job Satisfaction: A Mediating Model Approach

Abstract

This study was conducted to examine the influence of interactional justice in the relationship betweenperformance based pay and job satisfaction using 334 usable questionnaires gathered from employees who workin Malaysian private institutions of higher learning (PRIVATE INSTITUTION), Malaysia. Exploratory factoranalysis confirmed that the measurement scales used in this study met the acceptable standards of validity andreliability analyses. Further, the outcomes of Stepwise Regression analysis showed two important findings: First,performance based pay (i.e., participation in pay systems and adequacy of pay) significantly correlated with jobsatisfaction. Second, linking performance based pay (i.e., participation in pay systems and adequacy of pay) tointeractional justice significantly correlated with job satisfaction. Statistically, this result demonstrates thatinteractional justice does act as a partial mediating variable in the relationship between performances based paysand job satisfaction in the studied organizations. In addition, discussion, implications and conclusion areelaborated.