Pay information and employees’ perception of organizational support: the mediating role of pay satisfaction
| Date | 04 September 2024 |
| Pages | 161-177 |
| DOI | https://doi.org/10.1108/ER-07-2023-0356 |
| Published date | 04 September 2024 |
| Subject Matter | HR & organizational behaviour,Industrial/labour relations,Employment law |
| Author | José Manuel de la Torre-Ruiz,Eulogio Cordón-Pozo,María Dolores Vidal Salazar,Alejandro Ortiz-Perez |
Pay information and employees’
perception of organizational
support: the mediating role
of pay satisfaction
Jos
e Manuel de la Torre-Ruiz, Eulogio Cord
on-Pozo,
Mar
ıa Dolores Vidal Salazar and Alejandro Ortiz-Perez
Department of Business Management II, Universidad de Granada, Granada, Spain
Abstract
Purpose –Pay communication policies continue to garner attention in human resource management. This
article draws on social exchange theory to examine the consequences of different types of pay information on
employees’ perceived organizational support (POS). Similarly, it draws on the relational model to examine
whether pay level satisfaction and satisfaction with variable pay and pay raise procedures mediate the
relationships between the different types of pay information and employee POS.
Design/methodology/approach –The hypothesized model was tested using structural equation modeling
in a sample of 695 employees of Spanish firms.
Findings –The five types of pay information considered in this study did not have a direct effect on employee
POS. Furthermore, distributive base pay information and distributive base pay information on other
employees in the firm and in the industry had an indirect influence on POS through the multiple mediating
effect of pay comparison and pay level satisfaction. Finally, procedural variable pay and procedural pay raise
information were indirectly related to employee POS through satisfaction with pay procedures.
Originality/value –This study highlights the importance of considering the type of pay information
provided to employees and the need to understand the mediating variables that explain how each type of pay
information can influence employees’ POS.
Keywords Pay, Pay information, Perceived organizational support, Pay level satisfaction,
Satisfaction with pay procedure, Pay comparison
Paper type Research paper
Introduction
Employees’ perception of organizational support (POS) has been found to be positively related
to their job satisfaction, positive mood, and reduced strains like emotional exhaustion and
burnout (Kurtessis et al., 2017;Rhoades and Eisenberger, 2002). The importance of assessing
employees’ POS has thus gained critical significance in recent years because many employees
Employee
Relations: The
International
Journal
161
© Jos
e Manuel de la Torre-Ruiz, Eulogio Cord
on-Pozo, Mar
ıa Dolores Vidal Salazar and Alejandro Ortiz-
Perez. Published by Emerald Publishing Limited. This article is published under the Creative Commons
Attribution (CC BY 4.0) licence. Anyone may reproduce, distribute, translate and create derivative works of
this article (for both commercial and non-commercial purposes), subject to full attribution to the original
publication and authors. The full terms of this licence may be seen at http://creativecommons.org/licences/
by/4.0/legalcode
We thank Edenred SA for his support in the realization of this research. The authors want to thank the
members of the research group, “Innovation, Sustainability and Business Development” (SEJ-481), for their
help and comments.
Funding: This work was supported by the Andalusian Government under grant number A-SEJ-192-
UGR20 and grant number P20_00568, Spanish Government, Ministry of Economy and Competitiveness
under grant number ECO2017-88222-P and the University of Granada under grant number PP2016-PJI04.
Funding for language editing was received from the Research Grant Programme of Faculty of Economics
and Business (UGR). Funding for open access charge was received from the University of Granada/CBUA.
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/0142-5455.htm
Received 19 July 2023
Revised 13 December 2023
8 May 2024
5 August 2024
Accepted 5 August 2024
Employee Relations: The
International Journal
Vol. 46 No. 9, 2024
pp. 161-177
Emerald Publishing Limited
0142-5455
DOI 10.1108/ER-07-2023-0356
are currently reevaluating their relationships with their organizations. Phenomena such as
“quiet quitting,” where employees feel undervalued and unappreciated, lead to a decrease in
their commitment to the organization, minimal engagement in the tasks outlined in their job
descriptions, and a reluctance to take on responsibilities. According to June 2023 Gallup data,
59% of global workers report not being engaged at work, and it is estimated that lost
productivity from quiet quitting could account for $8.8tn globally, or 9.9% of global gross
domestic product (Gallup, 2023). As POS influences the behaviors specified in employees’ stated
job responsibilities and, even more so, in activities that go beyond standard performance
(Kurtessis et al., 2017), it is especially important for employers to pay attention to employees’
POS to prevent phenomena like quiet quitting (Atalay and Da
gıstan, 2023).
Among the different factors that can influence POS, the impact of rewards may depend on how
employees perceive them (Rhoades and Eisenberger, 2002). These perceptions, in turn, can be
shaped by the information that employees receive related to such rewards (Sweins and Kalmi,
2008). For this reason, in this study, we paid attention to pay communication, which is “the
organizational practice that determines if, when, how, and which pay information is
communicated to employees and possibly outsiders” (Marasi and Bennett, 2016, p. 51).
Research results on pay communication are far from consistent: Some studies have shown
positive effects of providing pay information to employees (e.g. Marasi et al., 2018), while others
have shown negative effects (e.g. Bamberger and Belogolovsky, 2017). In order to explain those
contradictory results, some authors have stated that not only quantitative pay communication but
qualitative, such as the type of pay information provided, should be analyzed (e.g. Marasi and
Bennett, 2016). Accordingly, following SimanTov-Nachlieli and Bamberger (2021) and Holtzen
(2022), who distinguished procedural pay transparency from distributive pay transparency, this
study analyzed the effect of five types of pay information that organizations can provide to their
employees as a result of organizational pay communication practices. Three were related to
distributive or outcome pay (i.e. information on own base pay, the base pay of other employees in
the firm, and that of other employees in the industry) and two to procedural pay transparency (i.e.
variable pay and pay raise information). Drawing on social exchange theory (Blau, 1964), we
analyzed how such information influences employees’ POS.
Additionally, regarding the importance that pay communication can have on how
employees perceive their rewards (Sweins and Kalmi, 2008), we hypothesized that employee
pay level satisfaction, defined as “an individual’s satisfaction with his or her base pay”
(Miceli and Lane, 1991, p. 245), and satisfaction with pay procedures, specifically satisfaction
with how pay raises and variable pay are determined, could mediate these relationships.
Thus, this paper contributes to the literature on pay communication by considering the
individual effects of the different types of pay information on employee POS and by clarifying
the mediating mechanisms that explain how pay information can influence employee POS.
Pay communication
Organizations can adopt different pay communication policies, ranging from pay secrecy,
that is (at its most extreme level), avoiding providing any pay information by the
organization and even forbidding employees from discussing their pay information among
themselves and with outsiders; to a pay openness policy, where (at its most extreme level)
organizations allow employees to discuss their pay information among themselves and with
outsiders, and the organization also provides complete pay information to employees and
outsiders (Marasi and Bennet, 2016).
Since the seminal work on pay secrecy by Lawler (1965), several studies have reviewed
and summarized the effects of pay communication (e.g. Colella et al., 2007;Marasi and
Bennett, 2016;Brown et al., 2022). Nevertheless, there is still debate whether pay information
should be provided.
ER
46,9
162
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