Nurul Farahin Musa.
This research is conducted to make a comparison between the effects and the importance of external equity, internal equity, procedural justice, individual equity and informational justice on the satisfaction towards the pay level among employees within a firm. It is to figure out how the importance of individual, external and internal equity would make the employee feel satisfy on the pay they received. This study also is expected to give a better understanding on the perceptions of the fairness of pay level in the firm. The research would give the employer in Malaysia on better perspective on how to ensure all the employees are satisfied with the pay they received and how to design a better and more effective pay structure for all employees. The findings and results of this study would also help the management of the firm to align between the external conditions with the internal alignment and settle down any arises conflict occurs. The study also is expected to help the organisation on designing a better compensation programs. To determine the results of these findings, the policy-capturing methods were used and data from both group and individual analysis were considered and analyse. There are three factors that contribute to the employee’s satisfaction towards the pay level within a firm. The study successfully figures out that the most important factors are individual equity it is shown through the individual analysis.
Pay level and pay mix are among the most important components on the employees satisfaction towards the benefits and reward offered by the organisation. The employee satisfaction is associated with the pay receive by them and the contribution made. In Malaysia, the most common issue when it comes to compensation is equity and how the employee perceives the fairness of the pay. It is important for the organisation in Malaysia to understand to what extent the pay level satisfaction among employee may be increase.
As the turnover rate is increasing in most of the organisation in Malaysia, it is important for the organisation to alter the employee’s perception on the pay level and pay plan for them. It is the manager’s responsibility to build and design the attractive pay structure in order to attract the competent job hunter. Offering the attractive pay structure not only will attract the competent job hunter but also may increase the motivation of current employee to produce more and to strive and increase their performance thus, increase the organisation productivity. Factor to be consider in increasing the pay level satisfaction among the employees are, the employee’s perception on equity that is, individual equity, external equity, internal equity, procedural justice and informational justice. Those are the factors that will contribute to the pay level satisfaction. The more satisfy the employee feel, it would alter their perception on the organisation fairness. Equality and fairness perception are very important in managing human resource in an organisation. It requires much afford on maintaining the fairness and equity in the compensation program. The negative perception of the fairness and pay equity may reduce the employee’s satisfaction and decrease the commitment and trust towards the organisation and lead to depression on work (Spector B., 2001). The employee may loss trust on the organisation and jump to another organisation. This is why most of the organisation in Malaysia is facing with high level of turnover, so, the negative perception that the employees had towards the fairness of the pay level may worsen the situation.
Most of the firms and organisation in Malaysia these days has a weak relationship between the objective pay of the organisation and employee satisfaction towards it. The policy that the organisation applied may leave the employees felt that they were...