Understanding Pay Satisfaction: the Limits of a Compensation System Implementation

Although a common organizational intervention, research investigating the impact of compensation system implementation on employee outcomes is limited. As one type of intervention, job evaluation usually includes substantial employee participation in order to improve employee pay satisfaction. This assumption, however, is rarely validated. To address this weakness, the present study examines, in a quasi-experimental field study at a manufacturing firm (N = 168), the extent to which participation in the job evaluation process during a compensation system implementation influences pay satisfaction. Both longitudinal and between-group comparisons failed to show a participation effect on pay satisfaction, casting doubt on the organizational development benefits of this common intervention.