Structural relationship between pay administration and employee’s commitment: a case study in Pos Malaysia Berhad

Mohd Ridwan Abd Razak

QR Code Link :
Type :	article
Subject :	HD Industries. Land use. Labor
Main Author :	Mohd Ridwan Abd Razak
Additional Authors :	Enah Ali
Title :	Structural relationship between pay administration and employee’s commitment: a case study in Pos Malaysia Berhad

Place of Production :	Tanjong Malim
Publisher :	Fakulti Pengurusan dan Ekonomi
Year of Publication :	2021
Corporate Name :	Universiti Pendidikan Sultan Idris
PDF Full Text :	Login required to access this item.

Abstract : Universiti Pendidikan Sultan Idris

Pay administration is one of the most important functions in the organisational administration domain. Contemporary research shows that the capability of an organisation’s administrator to share the information about pay administration, encourage employees’ engagement in pay administration, and enforce good performance evaluation may have a positive and significant influence on employees’ commitment toward the organisation. However, there is a limited explanation about the importance of pay administration as an important factor in the organisational pay administration domain. This study is performed to analyse the importance and performance of each element in pay administration towards employee commitment. Main data are collected from 400 self-report questionnaires filled by the employees of Pos Malaysia Berhad in Klang Valley. The results of Partial Least Square - Structural Equation Modeling (PLS-SEM) stipulate that pay administration is positively and significantly interrelated with employees’ commitment. Therefore, the results show that the ability of an organisation’s pay administrator to successfully implement effective information sharing, encourage employee engagement, and practice good performance evaluation in administering pay systems may enhance employees’ commitment to the organisation.

References

Abd Razak, M. R., & Ali, E. (2021). Interactional fairness as a mediator between merit-based pay management and organisational commitment. Asia-Pacific Management Accounting Journal, 16(1), 93-104.

Abidin, F., Ismail, A., Muhamad, N. S. A., & Mohamad Noor, A. (2020). Effect of perceived fairness in pay system on work-related attitude. International Journal of Management Studies (IJMS), 27(2), 1-26.

Abugre, J. B., & Nasere, D. (2020). Do high-performance work systems mediate the relationship between HR practices and employee performance in multinational corporations (MNCs) in developing economies?. African Journal of Economic and Management Studies, 11(4), 541-557.

Antonietti, R., Antonioli, D., & Pini, P. (2017). Flexible pay systems and labour productivity. International Journal of Manpower, 38(4), 548-566.

Azman, I, Rozanariah, M. S., & Mohd Hamran, M. 2014. Communication Openness In Performance Appraisal Systems Enhancing Job Satisfaction. Journal of Public Administration, Finance and Law, 5, 98-109.

Azman, I., Hasan, A. M., Norashikin, S. H., Ahmad Zaidi, S., Girardi, A., & Muhammad

Madi, A. (2011). Relationship between performance-based pay, interactional justice and job satisfaction: A mediating model approach. International Journal of Business and Management, 6(11), 170 – 180.

Bayo-Moriones, A., & de la Torre, R. (2021). Analysing the relationship between QM, performance appraisal and pay for performance. Total Quality Management & Business Excellence, 1-28.

Benkarim, A., & Imbeau, D. (2021). Organisational commitment and lean sustainability: Literature review and directions for future research. Sustainability, 13(6), 1-24.

Coffie, R. B., Boateng, K. A., & Coffie, F. (2021). Organisational commitment in HRM practices: Insights from the Ghanaian banking industrial experience. Insights into Economics and Management, 6, 125-142.

Cooke, F. L., Cooper, B., Bartram, T., Wang, J., & Mei, H. (2019). Mapping the relationships between high-performance work systems, employee resilience and engagement: A study of the banking industry in China. The International Journal of Human Resource Management, 30(8), 1239-1260.

Creswell, J. W. & Creswell, J. D. (2017). Research Design: Qualitative, Quantitative, and Mixed Methods Approaches. (5th ed.). New York, Sage Publication.

Daniel, C. O. (2019). Compensation management and its impact on organisational commitment. International Journal of Contemporary Applied Researches, 6(2), 26-36.

Eriksson, Y. U., Larsson, B., & Adolfsson, P. (2020). Employees of Greatness: Signifying Values in Performance Appraisal Criteria. Nordic Journal of Working Life Studies, 11(2), 121-141.

Folger, R., & Cropanzano, R. (1998). Organizational Justice and Human Resource Management. Sage, Beverly Hills, CA

Godard, J. (2020). Labor and employment practices: The rise and fall of the new managerialism. The Palgrave handbook of management history, 913-933.

Hair, J. F., Hult, G. T. M., Ringle, C. M., & Sarstedt, M. (2017). A primer on partial least squares structural equation modeling (PLS-SEM) (2nd ed.). Thousand Oaks, SAGE Publications Inc.

Hee, O. C., Yi, H. S., Ping, L. L., Kowang, T. O., & Fei, G. C. (2019). Factors influencing job satisfaction in the palm oil industry in Malaysia. International Journal of Academic Research in Business and Social Sciences, 9(2), 516-527.

Heisler, W. (2021). Increasing pay transparency: A guide for change. Business Horizons, 64(1), 73-81.

Iqbal, S., Tian, H., Akhtar, S., & Sohu, J. (2019). Impacts of performance-based pay on employee productivity; mediated by employee training. International Journal of Research and Review, 6(10), 235-241.

Ismail, A., Mahdi, N. M. N., Mat, N., Ali, M. H., & Ali, N. A. A. M. (2018). Administration of the merit pay systems enhancing work outcomes. Asian Journal of Accounting and Governance, 9, 99-110.

Jaros, S. (2007). Meyer and Allen model of organisational commitment : Measurement issues. The Icfai Journal of Organizational Behavior, 6(4), 7–26.

Jatmiko, B., Laras, T., & Rohmawati, A. (2020). Budgetary participation, organisational commitment, and performance of local government apparatuses. The Journal of Asian Finance, Economics, and Business, 7(7), 379-390.

Kang, E., & Lee, H. (2021). Employee compensation strategy as sustainable competitive advantage for HR education practitioners. Sustainability, 13(3), 1-23.

Katovich, E. S., & Maia, A. G. (2018). The relation between labor productivity and wages in Brazil. Nova Economia, 28(1), 7-38.

Kaur, G., Sharma, R. R. K., & Jha, M. K. (2019). Influence of organisational culture on total reward preferences: A study of IT sector in India. OPUS: HR Journal, 10(2), 84-105.

Kawiana, I., Dewi, L. K. C., Hartati, P. S., Setini, M., & Asih, D. (2021). Effects of leadership and psychological climate on organisational commitment in the digitisation era. The Journal of Asian Finance, Economics, and Business, 8(1), 1051-1062.

Krishnan, R., Ahmad, B., Farihah, N. A., & Haron, H. (2018). The effect of employees’ perceived fairness of performance appraisal systems on employees’ organisational commitment. International Journal of Academic Research in Business and Social Sciences, 8(3), 448-465.

Lawler, E. E. (1971). Pay and Organisational Effectiveness: A Psychological View. McGraw Hill, New York.

Lee, S. G., & Kang, B. S. (2017). The relation of the awareness of teacher librarians about the performance-based pay system and their job satisfaction. Journal of Korean Libraryand Information Science Society, 48(2), 159-186.

Loan, L. (2020). The influence of organisational commitment on employees’ job performance: The mediating role of job satisfaction. Management Science Letters, 10(14), 3307-3312.

Lopez-Cabrales, A., Bornay-Barrachina, M., & Diaz-Fernandez, M. (2017). Leadership and dynamic capabilities: The role of HR systems. Personnel Review, 46(2), 255-276.

Mabaso, C. M., & Dlamini, B. I. (2018). Total rewards and its effects on organisational commitment in higher education institutions. SA Journal of Human Resource Management, 16(1), 1-8.

Marasi, S. A. (2014). Pay Communication : An Overview, Scale Development, and Analysis of Its Influence on Workplace Deviance. Louisiana Tech University.

Nguyen, D. X. (2019). Minimum wages and firm productivity: Evidence from Vietnamese manufacturing firms. International Economic Journal, 33(3), 560-572

Wombacher, J. C., & Felfe, J. (2017). Dual commitment in the organisation: Effects of the interplay of team and organisational commitment on employee citizenship behavior, efficacy beliefs, and turnover intentions. Journal of Vocational Behavior, 102, 1-14.

Woo, K., & Cho, J. (2016). Transferring the cost of wage rigidity to subcontracting firms: The case of Korea. Sustainability, 8(9), 845-860.

Yu, Y. S. (2019). The subjective study of the high school teachers on the performance-basedpay system for teachers. Journal of the Korea Convergence Society, 10(3), 265-274.

This material may be protected under Copyright Act which governs the making of photocopies or reproductions of copyrighted materials.
You may use the digitized material for private study, scholarship, or research.

Back to previous page