Skip to main content

Advertisement

Log in

Understanding Pay Satisfaction: Effects of Supervisor Ethical Leadership on Job Motivating Potential Influence

  • Published:
Journal of Business Ethics Aims and scope Submit manuscript

Abstract

Traditionally, research focused on determining the causes of employee pay satisfaction has investigated the influence of job-related inputs, both extrinsic and intrinsic to the job itself. Together with these inputs, pay-related fairness issues have played an important role in explaining the phenomenon. However, few studies consider the factors linked to fairness issues, such as ethical leadership. Because ethical leadership necessarily entails the concept of fairness, it seemingly should have a positive effect. Furthermore, because the presence of supervisor ethical leadership (SEL) offers strong chances for employees to achieve moral accomplishments and excel in the practice of their jobs, SEL should enhance the effects of intrinsic job inputs. Whereas high job motivating potential (JMP) makes it easier for employees be self-actualized, moral fulfillment is necessary for them to obtain authentic self-actualization at work and minimize the impact of pay deficiencies. Along with SEL, JMP should be shaped to increase positive experiences of job meaningfulness, responsibility for job outcomes, and knowledge of results at work, which can lead to enjoyment in doing the job in itself, not just for compensation-related motives. Hierarchical regression analysis with a sample of 151 employees in a diverse set of Spanish organizations supports the direct effects of JMP and SEL and shows that higher levels of SEL increase the positive effects of JMP on pay satisfaction. The practical implications of these findings and further research directions conclude this article.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Fig. 1
Fig. 2

Similar content being viewed by others

Notes

  1. We pre-tested the survey in several meetings with academics, employees, and human resource managers. On the basis of their feedback, we made several changes to the wording of some items. We again pilot-tested the revised instrument with a group of academics but no further revisions were necessary.

  2. To test for non-response bias, we assessed differences on the study’s dependent and key independent variables between the top one-fourth and bottom one-fourth of the 151 respondents by conducting corresponding independent sample t-tests. No significant differences occurred, which suggests that non-response bias is not a problem in this study. Furthermore, because all the measures appeared in the same measure instrument (i.e., questionnaire), we assessed common method bias through the one-factor Harman test (Scott and Bruce 1994). We conducted a principal components factor analysis on the questionnaire items; up to 17 factors with eigenvalues greater than 1 explained the total variance (88 %). Because many factors were indentified and the first factor did not account for most of the variance (27 %), common method bias is not a problem in this study.

References

  • Aamodt, M. G. (2010). Industrial/organizational psychology: An applied approach. Belmont, CA: Cengage Learning.

    Google Scholar 

  • Adams, J. S. (1965). Inequity in social exchange. In L. Berkowitz (Ed.), Advances in experimental social psychology (Vol. 2). New York: Academic Press.

    Google Scholar 

  • Armstrong, M. (2002). Employee reward. Towbridge, Wiltshire: Cromweld Press.

    Google Scholar 

  • Beabout, G. R. (2012). Management as a domain-relative practice that requires and develops practical wisdom. Business Ethics Quarterly, 22(2), 405–432.

    Article  Google Scholar 

  • Blakely, G. L., Andrews, M. C., & Fuller, J. (2003). Are chameleons good citizens? A longitudinal study of the relationship between self-monitoring and organizational citizenship behaviour. Journal of Business and Psychology, 18(2), 131–144.

    Article  Google Scholar 

  • Blau, P. M. (1964). Exchange and power in social life. New York: Wiley.

    Google Scholar 

  • Bright, D. S., Alzola, M., Stansbury, J., & Stavros, J. M. (2011). Virtue ethics in positive organizational scholarship: An integrative perspective. Canadian Journal of Administrative Sciences, 28, 231–243.

    Article  Google Scholar 

  • Brousseau, K. R. (1983). Toward a dynamic model of job–person relationships: Findings, research questions and implications for work systems design. Academy of Management Review, 8, 33–45.

    Google Scholar 

  • Brown, M. E., & Treviño, L. K. (2006). Ethical leadership: A review and future directions. The Leadership Quarterly, 17(6), 595–616.

    Article  Google Scholar 

  • Brown, M. E., Treviño, L. K., & Harrison, D. A. (2005). Ethical leadership: A social learning perspective for construct development and testing. Organizational Behaviour and Human Decision Processes, 97(2), 117–134.

    Article  Google Scholar 

  • Cameron, K., Bright, D., & Caza, A. (2004). Exploring the relationships between organizational virtuousness and performance. American Behavioural Scientist, 47(6), 1–24.

    Google Scholar 

  • Cameron, K. S., & Winn, B. (2012). Virtuousness in organizations. In K. S. Cameron & G. M. Spreitzer (Eds.), Handbook of positive organizational scholarship. London: Oxford University Press.

    Google Scholar 

  • Campion, M. A., & Berger, C. J. (1990). Conceptual integration and empirical test of job design and compensation relationships. Personnel Psychology, 43(3), 525–553.

    Article  Google Scholar 

  • Ciulla, J. B. (2004). Ethics and leadership effectiveness. In J. Antonakis, A. T. Cianciolo, & R. J. Sternberg (Eds.), The nature of leadership. Thousand Oaks, CA: Sage Publications.

    Google Scholar 

  • Craig, S. B., & Gustafson, S. B. (1998). Perceived leader integrity scale: An instrument for assessing employee perceptions of leader integrity. The Leadership Quarterly, 9(2), 127–145.

    Article  Google Scholar 

  • Cropanzano, R., Byrne, Z. S., Bobocel, D. R., & Rupp, D. E. (2001). Moral virtues, fairness heuristics, social entities, and other denizens of organizational justice. Journal of Vocational Behavior, 58, 164–209.

    Article  Google Scholar 

  • Daniels, M. I. (1984). The relationship between moral development and self-actualization. Journal of Moral Education, 13(1), 25–30.

    Article  Google Scholar 

  • Das, P., & Bhadury, B. (1997). Pay satisfaction of R&D personnel in manufacturing organizations: The role of career comparison process. Journal of High Technology Management Research, 8(2), 171–186.

    Article  Google Scholar 

  • Davies, V. J., Shackleton, D. R., & Parasuraman, R. (1983). Monotony and boredom. In G. R. J. Hockey (Ed.), Stress and fatigue in human performance (pp. 1–32). New York: Wiley.

    Google Scholar 

  • De Hoogh, A. H. B., & Den Hartog, D. N. (2008). Ethical and despotic leadership, relationships with leader’s social responsibility, top management team effectiveness and subordinates’ optimism: A multi-method study. The Leadership Quarterly, 19, 297–311.

    Article  Google Scholar 

  • De Vaus, D. (2002). Analyzing social science data: 50 key problems in data analysis. Thousand Oaks, CA: Sage Publications.

    Google Scholar 

  • DeConinck, J. B. (2009). The effect of leader–member exchange on turnover among retail buyers. Journal of Business Research, 62(11), 1081–1086.

    Article  Google Scholar 

  • DeConinck, J. B., & Stilwell, C. D. (2004). Incorporating organizational justice, role states, pay satisfaction and supervisor in a model of turnover intentions. Journal of Business Research, 57(3), 225–231.

    Article  Google Scholar 

  • Delaney, J. T., & Sockell, D. (1992). Do company ethics training programs make a difference? An empirical analysis. Journal of Business Ethics, 11(9), 719–727.

    Article  Google Scholar 

  • Deshpande, S. P. (1996). The impact of ethical climate types on facets of job satisfaction: An empirical investigation. Journal of Business Ethics, 15(6), 655–660.

    Article  Google Scholar 

  • Dukerich, J. M., Nichols, M. L., Elm, D. R., & Vollrath, D. A. (1990). Moral reasoning in groups: Leaders make a difference. Human Relations, 43(5), 473–493.

    Article  Google Scholar 

  • Folger, R., & Konovsky, M. A. (1989). Effects of procedural and distributive justice on reactions to pay raise decisions. Academy of Management Journal, 32(1), 115–130.

    Article  Google Scholar 

  • Fried, Y., & Ferris, G. R. (1987). The validity of the job characteristics model. A review and meta-analysis. Personnel Psychology, 40(2), 287–322.

    Article  Google Scholar 

  • Friedrich, R. (1982). In defense of multiplicative terms in multiple regression equations. American Journal of Political Science, 26(4), 797–833.

    Article  Google Scholar 

  • Fu, W., Deshpande, S. P., & Zhao, X. (2011). The impact of ethical behavior and facets of job satisfaction on organizational commitment of Chinese employees. Journal of Business Ethics, 104, 537–543.

    Article  Google Scholar 

  • Gamero, C. (2003). Análisis económico de la satisfacción laboral. Tesis doctoral. Universidad de Málaga. Facultad de Ciencias Económicas y Empresariales, Málaga, Spain.

  • Goris, J. R., Vaught, B. C., & Pettit, J. D, Jr. (2003). Effects of trust in superiors and influence of superiors on the association between individual-job congruence and job performance/satisfaction. Journal of Business and Psychology, 17(3), 327–343.

    Article  Google Scholar 

  • Grojean, M. W., Resick, C. J., Dickson, M. W., & Smith, D. B. (2004). Leaders, values and organizational climate: Examining leadership strategies for establishing an organizational climate regarding ethics. Journal of Business Ethics, 55(3), 223–241.

    Article  Google Scholar 

  • Hackman, J. R., & Lawler, E. E. (1971). Employee reactions to job characteristics. Journal of Applied Psychology, 55(3), 259–286.

    Article  Google Scholar 

  • Hackman, J. R., & Oldham, G. R. (1975). Development of the job diagnostic survey. Journal of Applied Psychology, 60(2), 159–170.

    Article  Google Scholar 

  • Hackman, J. R., & Oldham, G. R. (1976). Motivation through the design of work: Test of a theory. Organizational Behavior and Human Performance, 16(2), 250–279.

    Article  Google Scholar 

  • Hackman, R., & Oldham, G. R. (1980). Work redesign. Quezon City: Addison-Wesley.

    Google Scholar 

  • Heneman, H. G, I. I. I. (1985). Pay satisfaction. In K. M. Rowland & G. R. Ferris (Eds.), Research in personnel and human resources management (Vol. 3, pp. 115–139). Greenwich, CT: JAI Press.

    Google Scholar 

  • Heneman, H. G, I. I. I., & Judge, T. A. (2000). Compensation attitudes. In S. L. Rynes & B. Gerhart (Eds.), Compensation in organizations: Current research and practice (pp. 61–103). San Francisco, CA: Jossey-Bass.

    Google Scholar 

  • Heneman, H. G, I. I. I., & Schwab, D. P. (1985). Pay satisfaction: Its multidimensional nature and measurement. International Journal of Psychology, 20(1), 129–141.

    Article  Google Scholar 

  • Herzberg, F. (1966). Work and the nature of man. Cleveland, OH: World Publishing Company.

    Google Scholar 

  • Herzberg, F., Mausner, B., & Snydermann, B. B. (1959). The motivation to work. New York: Wiley.

    Google Scholar 

  • Kahya, E. (2007). The effects of job characteristics and working conditions on job performance. International Journal of Industrial Ergonomics, 37(6), 515–523.

    Article  Google Scholar 

  • Kalshoven, K., Den Hartog, D. N., & De Hoogh, A. H. B. (2011). Ethical leader behavior and big five factors of personality. Journal of Business Ethics, 100(2), 349–366.

    Article  Google Scholar 

  • Koh, H Ch., & Boo, E. H. Y. (2001). The Link between organizational ethics and job satisfaction: A study of managers in Singapore. Journal of Business Ethics, 29(4), 309–324.

    Article  Google Scholar 

  • Kouzes, J. M., & Posner, B. Z. (2001). Bringing leadership lessons from the past into the future. In W. Bennis, G. Sprietzer, & T. Cummings (Eds.), The future of leadership: Today’s top leadership thinkers speak to tomorrow’s leaders (pp. 81–90). San Francisco, CA: Jossey-Bass.

    Google Scholar 

  • Krueger, A. B., & Schkade, D. (2008). Sorting in the labor market. Do gregarious workers flock to interactive jobs? Journal of Human Resources, 43(4), 859–883.

    Google Scholar 

  • Lam, S. K. (1998). A validity study of the pay satisfaction questionnaire in Hong Kong. Journal of Social Psychology, 138(1), 124–125.

    Article  Google Scholar 

  • Lawler, E. E, I. I. I. (1971). Pay and organizational effectiveness. New York: McGraw Hill.

    Google Scholar 

  • Lawler, E. E, I. I. I. (1981). Pay and organizational development. Reading, MA: Addison-Wesley.

    Google Scholar 

  • Lawler, E. E, I. I. I., & Jenkins, G. D, Jr. (1992). Strategic reward systems. In M. D. Dunnette & L. M. Hough (Eds.), Handbook of industrial and organizational psychology (Vol. 3). Palo Alto, CA: Consulting Psychologists Press.

    Google Scholar 

  • Maslow, A. H. (1943). A theory of human motivation. Psychological Review, 50(4), 370–396.

    Article  Google Scholar 

  • Mathieu, J. E., & Zajac, D. M. (1990). A review and meta-analysis of the antecedents, correlates and consequences of organizational commitment. Psychological Bulletin, 108(2), 171–194.

    Article  Google Scholar 

  • Mayer, D., Kuenzi, M., Greenbaum, R., Bardes, M., & Salvador, R. (2009). How low does ethical leadership flow? Test of a trickle-down model. Organizational Behavior and Human Decision Processes, 108(1), 1–13.

    Article  Google Scholar 

  • McLean, L. D. (2005). Organizational culture’s influence on creativity and innovation. A review of the literature and implications for human resource development. Advances in Developing Human Resources, 7(2), 226–246.

    Article  Google Scholar 

  • Medley, F., & Larochelle, D. R. (1995). Transformational leadership and job satisfaction. Nursing Management, 26(9), 64.

    Google Scholar 

  • Miceli, M. P., & Lane, M. P. (1991). Antecedents of pay satisfaction: A review and extension. In K. M. Rowland & G. R. Ferris (Eds.), Research in personnel and human resources management (Vol. 9). Greenwich, CT: JAI Press.

    Google Scholar 

  • Michalos, A. C. (1985). Multiple discrepancies theory. Social Indicators Research, 16, 347–413.

    Article  Google Scholar 

  • Miner, J. B. (2005). Organizational behavior. I. Essential theories of motivation and leadership. New York: M.E. Sharpe.

    Google Scholar 

  • Neter, J., Kunter, M. H., Nachtsheim, C. J., & Wasserman, W. (1996). Applied linear statistical models (4th ed.). Boston: Irwin.

    Google Scholar 

  • Neubert, M. J., Carlson, D. S., Kacmar, K. M., Roberts, J. A., & Chonko, L. B. (2009). The virtuous influence of ethical leadership behavior: Evidence from the field. Journal of Business Ethics, 90(2), 157–170.

    Article  Google Scholar 

  • Ng, T. W., Feldman, D. C., & Lam, S. S. (2010). Psychological contract breaches, organizational commitment and innovation-related behaviors: A latent growth modeling approach. Journal of Applied Psychology, 95(4), 744–751.

    Article  Google Scholar 

  • Nunnally, J. (1978). Psychometric theory (2nd ed.). New York: McGraw-Hill.

    Google Scholar 

  • Parry, K. W., & Proctor-Thomson, S. B. (2002). Perceived integrity of transformational leaders in organizational settings. Journal of Business Ethics, 35(2), 75–96.

    Article  Google Scholar 

  • Peterson, D. K. (2004). Perceived leader integrity and ethical intentions of subordinates. Leadership and Organization Development Journal, 25(1/2), 7–23.

    Google Scholar 

  • Petrescu, A. I., & Simmons, R. (2008). Human resource management practices and workers job satisfaction. International Journal of Manpower, 29(7), 651–667.

    Article  Google Scholar 

  • Piccolo, R. F., Greenbaum, R., Den Hartog, D. N., & Folger, R. (2010). The relationship between ethical leadership and core job characteristics. Journal of Organizational Behavior, 31, 259–278.

    Article  Google Scholar 

  • Posthuma, R. A. (2000). The dimensionality of supervisor evaluations of job performance. Journal of Business and Psychology, 14(3), 481–487.

    Article  Google Scholar 

  • Rego, A., Ribeiro, N., & Cunha, M. P. (2010). Perceptions of organizational virtuousness and happiness as predictors of organizational citizenship behaviours. Journal of Business Ethics, 93(2), 215–235.

    Article  Google Scholar 

  • Ronan, W. W., & Organt, G. J. (1973). Determinants of pay and pay satisfaction. Personnel Psychology, 26(4), 503–520.

    Article  Google Scholar 

  • Ruiz, P., Ruiz, C., & Martinez, R. (2011). Improving the leader-follower relationship: Top manager or supervisor? The ethical leadership trickle-down effect on follower job response. Journal of Business Ethics, 99(4), 587–608.

    Article  Google Scholar 

  • Ruiz-Palomino, P., & Martinez-Cañas, R. (2011). Human resource management and ethical behaviour: Exploring the role of training in the Spanish banking industry. Ramon Llull Journal of Applied Ethics, 2(1), 69–88.

    Google Scholar 

  • Schmidt, C. M. & Zimmermann, K. F. (1990). Work characteristics, firm size and wages. Working Paper 264, Industrial Relations Section, Princeton University, Princeton.

  • Scott, S. G., & Bruce, R. A. (1994). Determinants of innovative behavior: A path model of individual innovation in the workplace. Academy of Management Journal, 37(3), 580–607.

    Article  Google Scholar 

  • Shapiro, E. A., & Wahba, M. A. (1978). Pay satisfaction: An empirical test of a discrepancy model. Management Science, 24(6), 612–622.

    Article  Google Scholar 

  • Spector, P. E. (1997). Job satisfaction: application, assessment, causes, and consequences. London: Sage.

    Google Scholar 

  • Stone, E. F., & Hollenbeck, J. R. (1989). Clarifying some controversial issues surrounding statistical procedures for detecting moderator variables: Empirical evidence and related matters. Journal of Applied Psychology, 74(1), 3–10.

    Article  Google Scholar 

  • Stringer, C., Didham, J., & Theivananthampillai, P. (2011). Motivation, pay satisfaction and job satisfaction of frontline employees. Qualitative Research in Accounting & Management, 8(2), 161–179.

    Article  Google Scholar 

  • Sturman, M. C., & Carraher, S. M. (2007). Using a random-effects model to test differing conceptualizations of multidimensional constructs. Organizational Research Methods, 10(1), 108–135.

    Article  Google Scholar 

  • Summers, T. P., & Hendrix, W. H. (1991). Modelling the role of pay equity perceptions: A field study. Journal of Occupational Psychology, 64(2), 145–157.

    Article  Google Scholar 

  • Sweeney, P. D. (1990). Distributive justice and pay satisfaction: A field test of an equity theory prediction. Journal of Business and Psychology, 4(3), 329–341.

    Article  Google Scholar 

  • Tang, T. L.-P., & Ibrahim, A. H. (1998). Antecedents of organizational citizenship behavior revisited: Public personnel in the United States and in the Middle East. Public Personnel Management, 27(4), 529–550.

    Google Scholar 

  • Tekleab, A. G., Bartol, K. M., & Liu, W. (2005). Is it pay levels or pay raises that matter to fairness and turnover? Journal of Organizational Behavior, 26(8), 899–921.

    Article  Google Scholar 

  • Toor, S.-R., & Ofori, G. (2009). Ethical leadership: Examining the relationships with full range leadership model, employee outcomes and organizational culture. Journal of Business Ethics, 90(4), 533–547.

    Article  Google Scholar 

  • Treviño, L. K., Brown, M., & Hartman, L. P. (2003). A qualitative investigation of perceived executive ethical leadership: Perceptions from inside and outside the executive suite. Human Relations, 55(1), 5–37.

    Article  Google Scholar 

  • Treviño, L. K., Hartman, L. P., & Brown, M. (2000). Moral person and moral manager: How executives develop a reputation for ethical leadership. California Management Review, 42(4), 128–142.

    Article  Google Scholar 

  • Turillo, C. J., Folger, R., Lavelle, J., Umphress, E., & Gee, J. (2002). Is virtue its own reward? Self-sacrificial decisions for the sake of fairness. Organizational Behaviour and Human Decision Processes, 89(1), 839–865.

    Article  Google Scholar 

  • Van Dyne, L., Graham, J. W., & Dienesch, R. M. (1994). Organizational citizenship behavior: Construct redefinition, measurement and validation. Academy of Management Journal, 37(4), 765–802.

    Article  Google Scholar 

  • Vandenberghe, C., & Tremblay, M. (2008). The role of pay satisfaction and organizational commitment in turnover intentions: A two-sample study. Journal of Business Psychology, 22(3), 275–286.

    Article  Google Scholar 

  • Viswesvaran, Ch., Deshpande, S. P., & Joseph, J. (1998). Job satisfaction as a function of top management support for ethical behaviour: A study of Indian managers. Journal of Business Ethics, 17, 365–371.

    Article  Google Scholar 

  • Vitell, S. J., & Davis, D. L. (1990). The relationship between ethics and job satisfaction: An empirical investigation. Journal of Business Ethics, 9(6), 489–494.

    Article  Google Scholar 

  • Wahba, M. A., & Bridwell, L. G. (1976). Maslow reconsidered: A review of research on the need hierarchy theory. Organizational Behavior and Human Performance, 15(2), 212–240.

    Article  Google Scholar 

  • Wallumbwa, F. O., Mayer, D. M., Wang, P., Wang, H., Workman, K., & Christensen, A. L. (2011). Linking ethical leadership to employee performance: The roles of leader-member exchange, self-efficacy, and organizational identification. Organizational Behavior and Human Decision Processes, 115, 204–213.

    Article  Google Scholar 

  • White, D. W., & Lean, E. (2008). The impact of perceived leader integrity on subordinates in a work team environment. Journal of Business Ethics, 81, 765–778.

    Article  Google Scholar 

  • Williams, M. L., McDaniel, M. A., & Nguyen, N. T. (2006). A meta-analysis of the antecedents and consequences of pay level satisfaction. Journal of Applied Psychology, 91(2), 392–413.

    Article  Google Scholar 

  • Wright, P., McMahan, G., & McWilliams, A. (1994). Human resources and sustained competitive advantage: a resource-based perspective. International Journal of Human Resource Management, 5(2), 301–326.

    Article  Google Scholar 

  • Yidong, T. & Xinxin, L. (2012). How ethical leadership influence employees’ innovative work behavior: A perspective of intrinsic motivation. Journal of Business Ethics. doi:10.1007/S10551-012-1455-7.

Download references

Author information

Authors and Affiliations

Authors

Corresponding author

Correspondence to Pablo Ruiz-Palomino.

Rights and permissions

Reprints and permissions

About this article

Cite this article

Ruiz-Palomino, P., Sáez-Martínez, F.J. & Martínez-Cañas, R. Understanding Pay Satisfaction: Effects of Supervisor Ethical Leadership on Job Motivating Potential Influence. J Bus Ethics 118, 31–43 (2013). https://doi.org/10.1007/s10551-012-1549-2

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10551-012-1549-2

Keywords

Navigation