Effect of Manager’s Role in Performance Based Pay on Employee Outcomes

Authors

  • Azman, I. Faculty of Economics & Management, Universiti Kebangsaan Malaysia
  • Mohammad Fuad, Z. Faculty of Economics & Management, Universiti Kebangsaan Malaysia
  • Aimi, A. Institut Islam Hadhari, Universiti Kebangsaan Malaysia
  • Hasan Al-Banna, M. Faculty of Defence Management and Studies, Universiti Pertahanan Nasional Malaysia
  • Rashidi, A. Centre of Modern Language and Human Sciences, Universiti Malaysia Pahang

DOI:

https://doi.org/10.7187/GJAT652014.04.02

Keywords:

C o m p e n s a t i o n, Pay Communication, Performance Appraisal, Job Satisfaction, Organizational Commitment

Abstract

According to the recent literature pertaining on Islamic based organizational compensation, performance based pay consists of two essential features: communication and performance appraisal. Recent studies in this field highlights that the ability of managers to appropriately communicate pay information and appraise employee performance may have a significant impact on employee outcomes, especially job satisfaction and organizational commitment. Therefore, this study was undertaken to assess the relationship between manager’s role in performance based pay and employee outcomes using self-administered questionnaires collected from employees at a district council in Peninsular Malaysia. The outcomes of the SmartPLS path model analysis showed that pay communication does not act as an important determinant of job satisfaction, but performance appraisal does act as an important determinant of job satisfaction. Conversely, pay communication and performance appraisal act as important determinants of organizational commitment. In addition, this study provides discussion, implications and conclusion.

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Published

26-08-2024

How to Cite

Azman, I., Mohammad Fuad, Z., Aimi, A., Hasan Al-Banna, M., & Rashidi, A. (2024). Effect of Manager’s Role in Performance Based Pay on Employee Outcomes. Global Journal Al-Thaqafah, 4(2), 41–58. https://doi.org/10.7187/GJAT652014.04.02