The Mediating Effects of Procedural Justice on the Relationship between Performance-based Remuneration Management and Job Satisfaction
Kesan Pengantara Keadilan Prosedur ke Atas Hubungan di Antara Pengurusan Saraan Berdasarkan Prestasi dan Kepuasan Kerja

Graduate School of Business
Universiti Kebangsaan Malaysia
43600 UKM Bangi, Selangor, MALAYSIA

mohdridwan76@gmail.com

Faculty of Economics and Management
Universiti Kebangsaan Malaysia
43600 UKM Bangi, Selangor, MALAYSIA.

azisma08@gmail.com

Abstract

In the era of fourth industrial revolution, remuneration management has become an important organizational strategy for achieving organizational objectives. The purpose of this study is to explore the influence of performance-based remuneration management on employee’s job satisfaction through the mediating role of procedural justice. A crosssectional technique was employed to collect primary data from 232 employees of private higher educational institutions in Peninsular Malaysia who experienced the implementation of performance-based remuneration. The Partial Least Square Structural Equation Modelling (PLS-SEM) was used in the data analysis. The outcomes displayed three important findings: first, the relationship between management of performance-based remuneration and procedural justice was significant. Second, the relationship between management of performance-based remuneration, procedural justice and intrinsic job satisfaction was significant. Third, the relationship between management of performance-based remuneration, procedural justice and extrinsic job satisfaction was significant. Statistically, this result confirms that influence of management of performance-based remuneration on job satisfaction is indirectly affected by procedural justice in the studied organizations. This study provides empirical evidence on the importance of procedural justice in managing performance-based remuneration. It is an important input to enhancing employee’s job satisfaction in the organization. Further, the study concludes with a discussion on the contributions, limitations and suggestions for future research.

Keywords

extrinsic job satisfaction; intrinsic job satisfaction; job satisfaction; Management of performance-based remuneration; procedural justice
https://doi.org/10.17576/pengurusan-2018-52-07

Citation

Abd Razak, M. R., & Ismail, A. (2018). The Mediating Effects of Procedural Justice on the Relationship between Performance-based Remuneration Management and Job Satisfaction. Jurnal Pengurusan, 52, 85–101. https://doi.org/10.17576/pengurusan-2018-52-07

@article{abdrazak2018mediating,
  title={The Mediating Effects of Procedural Justice on the Relationship between Performance-based Remuneration Management and Job Satisfaction},
  author={Abd Razak, Mohd Ridwan and Ismail, Azman},
  journal={Jurnal Pengurusan},
 

volume={52},
  number={},
  pages={85—101},
  year={2018},
  doi={https://doi.org/10.17576/pengurusan-2018-52-07},
  publisher={Penerbit UKM},
}

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52 (2018) 85 – 101

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