A Longitudinal Study of Pay Satisfaction: An Examination of Reactions to Commitment and Work Performance

Most compensation attitudes research has taken a cross-sectional approach to examining the relationship between pay satisfaction (PS) and individuals´ attitudes and behaviors. This study used a longitudinal design to examine the effects of PS dimensions (pay level, benefit, pay raise, pay structure/ administration, and bonus) on employees´ affective commitment, work effort and performance. Data for this study were collected in two waves from 270 employees and their supervisors of ten hotels. Results showed that compared with process-based PS (pay raise and structure/administration), outcome-based PS (pay level and bonus) were stronger predictors of individual-outcomes (work effort and performance). On the other side, process-based PS (pay raise) was more likely to have a positive effect on organizational-outcomes (affective commitment). Implications of the results and directions for future research are identified.