Abstract
The salary peak system, developed as a replacement for the early retirement system, provides properties such as extension of the retirement age, decreased salary, and/or changes of job position. The purpose of this study is to explore the perceived attitudes toward the salary peak system, as well as job performance, satisfaction, and loyalty. In particular, this study investigates i) the effects of monetary variables (e.g., salary, incentive, pension); ii) the effects of the non-monetary variables (e.g., word of mouth, position, perceived job importance, organizational commitment); iii) the effects of overall attitudes on job performance; iv) the effects of job performance on satisfaction; and v) effects of satisfaction on loyalty. This study applied various theories and models to explain job performance, satisfaction, and loyalty. In order to measure the findings, this paper conducted surveys and applied statistical analysis using factor analysis and regression. The result provided consideration on old worker’s job motivation, satisfaction, and loyalty or intention to leave regarding how to apply the system. This study provides implications for management and public policy for a retirement system. This study suggests the need for the development of effective management and public policies for the salary and retirement system without decreasing motivation, satisfaction, and loyalty.
Highlights
T he aging of society is a widespread phenomenon occurring in many countries
While there are various problems raised by all types of the retirement system, this study investigates the effectiveness of a salary peak system as a special case
The questionnaire in the survey mainly consists of two major parts to ask opinions based on attitudes toward the salary peak system according to monetary factors, non-monetary factors, and psychological factors such as motivation, satisfaction and loyalty
Summary
T he aging of society is a widespread phenomenon occurring in many countries. Governments and companies have been trying to develop policies and plans for an aging society with consideration of diverse perspectives including demographic, economic, sociological, and political. As retirement has become a major consideration in an aging society, most of the public sector as well as private companies have developed a seniority-based system by considering worker’s tenure rather than work performance (Hwang 2006). Under the current retirement system, companies assume the burden of managing older workers with the high salary under the pay step or salary class system (Yoo and Ha, 2010). For such reasons, private companies have made an effort to change the system by combining the pay step system with a performance-related system, which determines salary based on job performance
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