PERFORMANCE BASED PAY MANAGEMENT AS A DETERMINANT OF PROCEDURAL JUSTICE

Abstract

The main objective of this study is to examine the relationship between performance based pay management (i.e., communication and participation) and procedural justice. A survey methods were used to collect selfreport survey of employees in currier service company. The SmartPLS path model analysis revealed two main findings: first, communication was significantly correlated with procedural justice. Second, participation was significantly correlated with procedural justice. These findings demonstrate that the ability of managers to properly implement performance based pay management may invoke feelings of procedural justice among employees in the organization. This study provides three important implications: first, this study may serve great potential for understanding the effect of communication and, participation in strengthening perception of procedural justice among employees in the organization. Second, the survey questionnaire used in this study had satisfactorily met the standards of validity and reliability analyses. This may lead to produced accurate and reliable research findings. Third, this study may serve as a guide for practitioners to enhance the effectiveness of organization’s performance based pay management as an important instrument to motivate employee in supporting organization’s pay system, objectives and strategies. In addition, discussion, implications and conclusion are described.