Mediation Effect of Perceived Leaders' Empathy Between Monetary Compensation and Private Universities' Lecturers' Happiness

Abstract

The outbreak of Covid-19 that began to attack the world at the end of the year 2019 certainly had an impact on the world economy. As a result, many companies and organisations are affected in terms of financial stability. Most organisations, including private universities, are forced to reduce the number of employees, resulting in the remaining employees having to bear the amount of work that is not commensurate with the compensation given. This situation has caused employees such as lecturers to feel unhappy and has ultimately affected the overall performance of the universities. A preliminary study by Raime et al. (2022) proved that monetary compensation has a significant relationship with lecturers' happiness. However, studies explaining the existence of a significant relationship between monetary compensation and lecturers' happiness are still lacking. Therefore, this study was conducted to examine perceived leaders' empathy as a mediator between monetary compensation and lecturers' happiness. Empirical results show that perceived leaders' empathy does not mediate the relationship between monetary compensation and lecturers' happiness. The β-value between these two variables only decreased with a small value after the presence of perceived leaders' empathy as a mediator. The results and discussion of this study are expected to be used as empirical evidence for leaders in the world, especially in Malaysia, not to take for granted the issue of monetary compensation and empathy among the employees. In addition, the results of this study can be used as a reference for policymakers in the field of human resource management to constantly improve and revisit policies related to employees' compensation and remuneration.