A study of salary satisfaction and job enthusiasm – mediating effects of psychological contract

Abstract

This article aims to explore the relationship among salary satisfaction, psychological contracts and job enthusiasm. Quantity research method was employed in this study. To verify the relationship, Correlation and Regression were adopted. First, salary satisfaction has significant effects on psychological contract; second, psychological contract has significant effects on job enthusiasm; third, salary satisfaction has a significant effect on job enthusiasm; and fourth, psychological contract has mediating effects between salary satisfaction and job enthusiasm. This study proved that the relationships between employees’ salary satisfaction and psychological contract and job enthusiasm are significant. The fairness-based salary is partially significantly correlated to psychological contract, indicating employees care about reasonable salary mechanism, motivating human resource strategy, appropriate reward system and available communication channels. When employees sense their salary is lower than the market average, they will have unsatisfactory feelings, make less effort to the organization and feel tired or want to leave the job. Therefore, business should conduct salary survey regularly, understand the average salary in the market and adjust salary mechanism based on the organization’s financial status.

Keywords:

• salary satisfaction
• psychological contract
• job enthusiasm
• Taiwan

JEL Classification:

• J24
• L84
• M54

Acknowledgements

The authors would like to thank Dr Ching-Hsiang Liu (National Formosa University) for additional support during the preparation of this manuscript.