Does good pay compensate for a dissatisfying job? The relationship between gross wage, wage satisfaction, job satisfaction and life satisfaction.

Abstract

Success in organisations is highly dependent upon people. To this end a significant amount of research has gone into how to motivate employees both with monetary and non-monetary incentives. In recent years organisations have realised that employees do not live in isolation and that aspects beyond their workplace can affect the motivation and performance. In light of this, a more positive approach is becoming popular which goes beyond work-related factors in an attempt to enhance employee well-being. The question is being asked, if satisfied workers are more productive, how can satisfaction be increased? Specifically, what effect does money have on satisfaction and how can this be leveraged? The general objective of this study was to examine the complex relationships that exist between gross wage, wage satisfaction, job satisfaction and life satisfaction. A cross sectional survey design was used. Access was gained to the South African data of the international Wage Indicator (WI) dataset. After data cleaning, a final sample of (n = 763) remained. Frequency tables were used to provide a summary of the data. Thereafter, cross tabulation was used to test the assumptions for hierarchical log linear analysis. As the assumptions were met, hierarchical log linear analysis was carried out to determine what relationships exist between gross wage, wage satisfaction, job satisfaction and life satisfaction. The results indicated that there is no direct link between gross wages and life satisfaction or between gross wages and job satisfaction. A direct relationship was found between gross wage and wage satisfaction (z = 6.00; Sig. = 0.70). Analysis revealed that relationships exist between job satisfaction and life satisfaction (z = 7.49; Sig. = 0.04), wage satisfaction and life satisfaction (z = 7.36; Sig. = 0.05), as well as between wage satisfaction and job satisfaction (z = 8.31; Sig. = 0.06). The knowledge gained for the interactions that exist between life, job and wage satisfaction and gross wage will assist organisations and individuals to better understand the importance of wages in the satisfaction relationship, without overestimating its effect. From the strength of effect between satisfaction variables, it is clear that focusing on satisfaction-enhancing variables beyond remuneration is also important. Recommendations are made which can be applied in practice and in future research.