Financial Compensation and Organizational Commitment: Differences Among Mexican and Malaysian Bankers

Abstract

Mexico and Malaysia are contrasting countries, geographically on opposite sides of the globe, with plenty of cultural differences, but with a similar gross domestic product per capita, and a similar banking commercial system. The hypothesis is the the economic compensation systems of bank employees in both countries, salaries, bonus and merit based pay, correlate with the same labor commitment. The research uses the same data collection instrument and results recently obtained in a Malaysian study to compare them to the Mexican case, through multivariate analysis. First results show that the Malaysian instrument is consistently valid and reliable in the case of Mexico. Second, the study confirms that Mexico’s strategy of raising the salary of bankers, or their bonuses, or merit-based payments, may increase organizational commitment but not altogether. Third, results suggest that merit-based compensation schemes are more efficient in countries with low uncertainty aversion, such as Malaysia, and less efficient in countries with high risk aversion, as in the case of Mexico.

Examining Employee’s Compensation Satisfaction and Work Stress in A Retail Company and Its Effect to Increase Employee Job Satisfaction

“…Some positive effects of attractive compensation are decrease in employee stress (Danish et al, 2015) and turnover intention (Tran, 2016). Pay satisfaction also believed to have positive impact on organizational commitment (Dhawan & Mulla, 2011;Llanos & Ahmad, 2017), motivation (Ferreira & Badya, 2016;Gungor, 2011), job satisfaction (Salisu et al, 2015;Singh & Loncar, 2010), employee performance (Darma & Supriyanto, 2017;Thaief et al, 2015), employee loyalty (Manurung, 2017;Onsardi et al, 2016), and employee productivity (Yamoah, 2013).…”

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“…Similar arguments can be put forward based on empirical evidence that faculty job security, compensation and job autonomy are pivotal HR practices that can influence on quality education in the universities (Lin and Ping, 2016;Llanos and Ahmad, 2017;Mahlagha et al, 2017). Therefore, it can be postulated that:…”

“…There have been a considerable number of research reports which suggest that faculty job security can have positive impact on organisational commitment behaviour of the faculty members positively (Meyer and Smith, 2000;Chang and Chen, 2002;Hausknecht et al, 2009;Moritz, 2014;Vujičić et al, 2015;Mahlagha et al, 2017) Therefore: H1: Faculty job security has a positive relation with faculty commitment behaviour. Compensation package of the faculty members is an important variable that can impact on faculty commitment behaviour to stay longer in the institution (Llanos and Ahmad, 2017). There are studies that examined the relationship between compensation and organisational commitment behaviour and found their positive relations between them (Paik et al, 2007;Nguyen et al, 2013;Alamelu et al, 2015;Riana and Wirasedana, 2016).…”

Mitigating turnover intention among private school teachers

“…That it then implicates reducing teachers' turnover intention, manifested in increased absenteeism, laziness to work, increased courage to violate work rules, the emergence of courage to oppose or protest to superiors, or seriousness in accomplishing all the responsibilities of an employee who seemed very different from usual [15]. The recent studies by scholars [41]- [47] also proved that compensation influences organizational commitment; meanwhile, the new investigation by researchers [28]- [37] shows that organizational commitment affects teachers' turnover intention. In line with the studies and argument above, can formulate the hypothesis: H4: Compensation has an indirect effect on teachers' turnover intention mediated by organizational commitment.…”