The relationship between salary satisfaction and job satisfaction

 

·        Pay

Pay is a quantifiable indicator of an employee's value since it reflects the degree of financial compensation that employees expect to get in exchange for their organisational contributions.

Companies must offer competitive and equal pay in order to compete for the best employees. It has been stated that while compensation initially motivates many workers, it lacks long-term potency as a motivator. In today's competitive economic environment, where strategic compensation planning is required, the importance of pay in luring and keeping employees at work has long been acknowledged (Jackson & Schuler, 2006).

·        Salary and job satisfaction

The relationship between pay practices and job satisfaction is crucial for boosting employee motivation, which will raise staff productivity. Wage efficiency theories claim that high wages occasionally can boost productivity. Because it significantly affects employee turnover. According to these views, it is difficult for employees who earn high salaries to leave their positions. In fact, the relationship between pay practices and job satisfaction according to ideas of efficiency wages is unclear. Numerous studies, including one by Stearin, look at the general job satisfaction of Dutch public employees in relation to their salary. The findings indicate that the presence of HR practices, namely pay practices, has a favourable impact on work satisfaction.

The effect of salary disparity and human resource management methods on employees' job satisfaction is also something that Bradley, Petrescu, and Simmons. However, some other elements of the workforce, such as gender, marital status, and market elements like labour availability and starting pay scale, can have an impact on professional staff retention.

Employees making high wages are more inclined to view incentive compensation as helpful. Maslow's (1943) hierarchy of wants states that having more money might help with satisfying esteem needs because a high pay implies superior aptitude and total individual value. Therefore, even once basic physiological and security demands are met, some people still view a large pay as a sign of competence and personal worth. Performance pay is evaluated because it is difficult to quantify, can encourage people to place too little emphasis on it, can weaken intrinsic interest, only some people benefit financially from it, is detrimental to teamwork and cooperation, and can cause general pay costs to increase earlier if not strongly measured.

Employee intention toward job safety affects pay satisfaction as well. Those who prioritise safety are happier at work than those who prioritise income increases. According to Kathawala, Moore, and Elmuti (1990), increased income satisfaction is preferred over increased job stability.

People who supported a pay rise demonstrated a less contented attitude toward their current salaries and overall job satisfaction. People who support improved safety rated it as a motivator but not as a satisfied, ranking it higher than income satisfaction. Those in support of a pay raise viewed remuneration as a motivation and a source of satisfaction, ranking it higher than job security.

·        Critical analysis on LOLC employees pay scheme.

Individuals must be motivated to fulfil an organisation's objectives, and a competitive compensation package must be offered to recognise performance that is in line with LOLC Finance's business model and strategy in order to maximise organisational effectiveness. Participating in yearly wage surveys allows LOLC Finance to keep its compensation structure competitive and in line with industry standards. LOLC pays its employees at a competitive market rate. So, it is helpful for job retention of the employees. LOLC Finance has gone through a merger. To be a successful merger it should engage its employees for the long term. In my opinion the pay scheme is at a good level. But it is better to adjust the pay considering the situation of the country. Because some BPOs pay allowances based on inflation and exchange rates of the country. LOLC as a large conglomerate can make the changes.

References

            Kathawala, Y., Moore, K.J. and Elmuti, D. (1990), "Preference between Salary or Job Security Increase", International Journal of Manpower, Vol. 11 No. 7, pp. 25-31. https://doi.org/10.1108/01437729010004174

            Jackson, S.E., Chuang, C.-H., Harden, E.E. and Jiang, Y. (2006), "Toward Developing Human Resource Management Systems for Knowledge-Intensive Teamwork", Martocchio, J.J. (Ed.) Research in Personnel and Human Resources Management (Research in Personnel and Human Resources Management, Vol. 25), Emerald Group Publishing Limited, Bingley, pp. 27-70.

            Susan E. Jackson (2006) Understanding Human Resource Management in the Context of Organisations and Their Environments.