Exchange Ideology, Performance Pay, and Pay Satisfaction: Evidence From South Korean Central Government

Abstract

The use of performance pay in public organizations is contentious partly because it can crowd out the intrinsic motivation associated with public service. However, not all public employees are service oriented and sensitivity to extrinsic rewards varies between them. Exchange ideology measures the strength of an individual’s belief that work effort should be proportional to treatment by the organization. We argue that this psychological trait conditions the relationship between performance pay and pay satisfaction. An analysis of survey data collected from Korean government employees shows that performance pay is positively related to pay satisfaction in the average case, and second that this relationship is stronger for employees with higher levels of exchange ideology. Monte Carlo simulations suggest that the size of the moderating effect is nontrivial. We discuss the relevance of our findings to performance-oriented human resource reform in the public sector.

Veterans and Job Satisfaction in the U.S. Federal Government: The Importance of Role Clarity in the First Years of Civilian Employment

“…Pay satisfaction is closely related to overall job satisfaction (Campbell & Im, 2019; Chordiya et al, 2017) and is often used as a control variable in job satisfaction studies, for example, by Fernandez and Moldogaziev (2015) and Bae and Kim (2016). In contrast to intrinsic motivation, pay satisfaction is associated with sufficient extrinsic motivation to work.…”

“…In contrast to intrinsic motivation, pay satisfaction is associated with sufficient extrinsic motivation to work. Studies note that sensitivity to external incentives can vary among public employees (Campbell & Im, 2019; Liu & Tang, 2011), and it is unlikely that employees will report satisfaction with their jobs if this critical hygiene factor is found wanting. We measure pay satisfaction using the item, “Considering everything, how satisfied are you with your pay?” The question is answered on a scale response from 1 = “very dissatisfied” to 5 = “very satisfied.”…”

Enhancing Organizational Citizenship Behaviors for the Environment: Integrating Social Identity and Social Exchange Perspectives

“… 44 , 45 In other words, when such employees perceive environmental support, care and encouragement from the focal organization, they are highly likely to identify with the organization and develop organizational identity with respect to the environment, and they prefer to reciprocate this support and care in the context of the environment 23 because they believe that continuous contributions to the environment can help ensure that they will receive further support and respect from their organization in the future. 21 , 46 However, when employees with a higher level of EI receive limited environmental care and support from their organization (ie, when they have a lower level of POSE), they may be less likely to reciprocate with respect to the environment and are unlikely to develop GOI.…”

Red Tape, Rule Legitimacy, and Public Service Motivation: Experimental Evidence From Korean Citizens

“…Like red tape research, research on PSM has generally focused on public employees. However, PSM is not the sole domain of public sector workers (and, of course, not all public sector workers are motivated primarily by PSM [Campbell & Im, 2019; Liu & Tang, 2011]), and a number of studies probe the effects of PSM among citizens. Following the organization research cited above, we expect there to be negative relationship between PSM and perceived red tape.…”