PERFORMANCE BASED PAY MANAGEMENT AS A DETERMINANT OF EXTRINSIC AND INTRINSIC JOB SATISFACTION

Recent studies about workplace compensation reveal that the ability of management to appropriately implement performance based pay may have a significant impact on job satisfaction. Although this correlation is significant, the role of performance based pay management as an important determinant has been given less attention in workplace compensation research literature. Therefore, this study was undertaken to investigate the correlation between performance based pay management and job satisfaction. Survey questionnaires were employed to collect data from employees at fire and rescue organizations in Malaysia. The outcomes of SmartPLS path model analysis showed two important findings: first, performance based pay management was an important determinant of job satisfaction. Second, specific components of performance based pay management: (1) communication, participation and performance appraisal were important determinants of extrinsic job satisfaction, (2) communication, and performance appraisal were important determinants of intrinsic job satisfaction, and (3) participation was not important determinant of intrinsic job satisfaction in the studied organization. Further, this study provides discussion, implications and conclusion. Keywords: Performance based pay, management, job satisfaction, SmartPLS