Microsoft Word - 1980 6-1 Black workers satisfaction with their pay.doc

BLACK WORKERS' SATISFACTION WITH THEIR PAY

X.C. BIRKENBACH

R. VAN DER MERWE

DEPARTMENT OF INDUSTRIAL AND ORGANISATIONAL PSYCHOLOGY

UNIVERSITY OF PORT ELIZABETH

OPSOMMING

Navorsing in Suid-Afrika toon dat finansiële vergoeding die

belangrikste faktor in die swart werker se werklewe is. Weinig

studies is egter tot dusver aangepak om veranderlikes te onder-

soek wat verband hou met die loontevredenheid van swart

werkers. Die huidige studie se bevindinge dui aan dat werkers

wat tevrede met hul lone is in die algemeen jonger is, meer

skoolopleiding het en minder finansiële afhanklikes het as

ontevrede werkers. Verder skyn dit asof hulle hul lone as meer

regverdigd beskou en ook loonstelsels beter verstaan as on-

tevrede werkers.

It is generally accepted that money holds a great deal of symbolic value for people in

our westernised society. It can not only be used for satisfying physical needs such as food,

clothing and shelter, but also to satisfy many of the so-called higher-order needs such as

status, esteem and recognition.

With regard to the black worker in South Africa who is being socialised into the

westernised way of life at a very rapid rate, the role of money assumes particular importance.

It is not surprising that studies have shown that pay is the most valued outcome a black

worker expects from his job (Verwey, 1968; Backer, 1973). However, it is surprising that

very little research has been reported in the literature in connection with black workers'

feelings towards and satisfaction with their pay. The implications of this statement are

thought-provoking particularly when one considers the magnitude of wage expenditures

incurred by organisations as well as the possible undesirable effects of pay dissatisfaction

such as absenteeism, labour turnover, grievances and strikes (Lawler, 1971).

The paucity of research with regard to pay can largely be ascribed to a general lack of

theoretical and empirical knowledge concerning the role of money in influencing human be-

haviour. However, the definitive work of Lawler (1971) in connection with pay satisfaction

Perspectives in Industrial Psychology 1980 6.1

Black workers’ satisfaction with their pay

(X.C. Birkenbach and R. van der Merwe)

and employee motivation has contributed greatly to narrowing the gap between psychological

theory and organisational pay practices.

Lawler (1971) bases his model of pay satisfaction on equity theory as developed by

Adams (1965) and others (e.g. Homans, 1961; Patchen, 1961) as well as on discrepancy

theory used by Porter (1961). It is hypothesised that pay satisfaction is determined by the

discrepancy between a person's perception of the pay he thinks he should receive and what he

actually receives. Satisfaction is said to result when these two factors are in agreement. When

pay actually received is less than what the person thinks it should be (i.e. underpaid), dissatis-

faction arises. On the other hand, if actual pay exceeds perceptions of what it should be (i.e.

overpaid), feelings of guilt and discomfort arise.

A person's feelings of equity play a major role in shaping his beliefs of what his pay

should be. For example, employees compare their job inputs (e.g. skill, education,

performance) and job demands (e.g. responsibility, working conditions) with the pay they

receive and the pay received by others. The higher their inputs and job demands are, the

higher they will feel their pay should be.

In addition to these factors, Dyer and Theriault (1976) believe that pay satisfaction is

influenced by employees' perceptions and understanding of the organisation's pay system such

as pay criteria and performance assessments. Also, certain environmental factors such as cost

of living and an employee's financial needs and family obligations could affect his satisfaction

with his pay. The more important these factors appear to the person, the greater the amount of

pay he will expect to receive.

The present study was embarked upon to investigate some of the assumptions of

Lawler's (1971) model of pay satisfaction in combination with the modifications suggested by

Dyer and Theriault (1976).

Owing to diverse cultural and educational experiences it could be expected that black

workers' views of their pay could differ from those of other groups especially in terms of as-

pects such as cost of living and understanding of pay practices. Balanced against this, are

other factors which could affect pay satisfaction such as poor wage history, and low job input

factors resulting from working on menial tasks with few job demands other than physical

factors.

Perspectives in Industrial Psychology 1980 6.1

Black workers’ satisfaction with their pay

(X.C. Birkenbach and R. van der Merwe)

METHOD

Respondents

Data were gathered by means of structured interviews from a sample of 114 black male

hourly paid production workers drawn from four secondary industry companies in the Port

Elizabeth-Uitenhage industrial area. All the respondents had at least six months service with

their respective companies and were drawn more or less equally from low, intermediate and

high wage levels. After meeting these criteria, respondents were chosen at random.

The Questionnaire

For the purpose of the study a questionnaire was developed in which a number of areas

relating to pay satisfaction were covered. The following areas are related to the research

reported here:
*
perceptions of inside and outside equity, understanding of wage increments,

and understanding of wage deductions. Response categories to these items were of an open-

ended nature.

Employee satisfaction with pay was determined by means of one final item to which

responses were recorded on a five point scale ranging from very dissatisfied to very satisfied.

It was expected that at the end of the interview, having explored a number of aspects of pay

and pay practices, the employee's mind would be more sharply focused on matters relating to

pay. As the previous questions were phrased neutrally, being mainly of an objective

perceptual nature and not attitudinal, employees were not expected to develop negative or

positive response sets. Earlier pilot studies with multiple satisfaction items had revealed very

high inter-correlations among items and appeared to be contributing little more than would a

single question (Birkenbach, 1978).

On the basis of employees' responses to the pay satisfaction item, they were categorised

into two groups, namely satisfied and dissatisfied and were then contrasted on a number of

variables. Responses obtained from satisfied and dissatisfied workers were analysed and

recorded as percentages. Differences between the two groups were determined by comparing

percentage responses obtained from each group. Significant differences were calculated by

means of a nomograph devised by Lawshe and Baker (1950). This nomograph is used to

calculate an omega value (ω) which, when substituted in the appropriate formula, gives t-

values which indicate the significance of the differences between percentages.

*
For a full discussion of the development and content of the questionnaire, refer to Birkenbach and Van der Merwe (1979).

Perspectives in Industrial Psychology 1980 6.1

Black workers’ satisfaction with their pay

(X.C. Birkenbach and R. van der Merwe)

Out of the total sample of 114 workers, 23 (20 percent) indicated that they were either

very satisfied or satisfied with their pay. These constituted the satisfied groups. The remainder

(80 percent) stated that they were either undecided, dissatisfied or very dissatisfied with their

pay. These employees constituted the dissatisfied group.

RESULTS AND DISCUSSION

Biographical factors

Age

The mean age for satisfied workers was 34,3 years, compared with 37,4 years for

dissatisfied workers (p< ,01).

Length of service did not appear to be an influencing factor in this finding as the

median length of service for satisfied workers was 4,9 years, and 5 years for dissatisfied

workers.

The finding supports the results from previous research conducted in this regard (e.g.

Lawler, 1971), but does seem in contrast to the stereotype of the older black worker being

more settled and satisfied in his job.

Educational background

The mean number of years of schooling for satisfied employees was 7,4 years,

compared with 6,8 for dissatisfied workers (p< ,01). As education can be considered an input

factor which the worker brings to his job and which should be rewarded, the finding that

satisfied workers had more education than dissatisfied workers is unexpected and appears to

be in contrast with previous findings (Klein and Mahrer, 1966).

Number of dependents

Table 1 illustrates the percentages of satisfied and dissatisfied workers with regard to

number of persons who are financially dependent on them. It will be observed that satisfied

workers had fewer persons who were financially dependent on them than dissatisfied workers.

This finding supports Goodman's (1974) hypothesis that the greater the financial obligations

to the family, the less the satisfaction with pay.

Considering the rate of inflation in the country, the wages earned by blacks, as well as

their home circumstances, it is believed that this factor will be of particular significance in black

Perspectives in Industrial Psychology 1980 6.1

Black workers’ satisfaction with their pay

(X.C. Birkenbach and R. van der Merwe)

workers' satisfaction with their pay. In many cases blacks have large families and, in addition,

are frequently expected to support relatives who are unable to support themselves. Conse-

quently, the demands made by the "extended family" can be seen as providing strong reasons

for pay dissatisfaction.

TABLE 1

PERCEPTIONS OF SATISFIED AND DISSATISFIED WORKERS WITH REFERENCE

TO NUMBER OF DEPENDENTS

Number of

dependents

satisfied

dissatisfied
ω

Level of

significance

0-3 35 7 0,51 0,01

4-7 56 70 0,20 N.S.

8 and more 9 23 0,28 N.S.

Perceptions of company pay system

Perceptions of outside equity

Outside equity refers to employees' views on the pay they receive in comparison with

wages earned by workers in other organisations. Table 2 gives the percentage responses

obtained from interviewees with regard on their feelings of equity of their pay in comparison

with the earnings of referent others outside the organisation.

Firstly, it will be noted that a far greater percentage of dissatisfied workers felt that

other companies paid higher wages than their own company did. Secondly, a greater

percentage of satisfied workers saw that the wages paid by other companies were in some

cases higher and in some cases lower than those paid by their own organisation. This finding

suggests that satisfied employees probably had a more realistic perception of labour market

conditions than dissatisfied workers. However, it will also be noted that a fairly large

percentage of satisfied employees did not know what other companies paid their workers.

Seemingly, ignorance of outside pay rates had contributed to their satisfaction with their pay.

Perspectives in Industrial Psychology 1980 6.1

Black workers’ satisfaction with their pay

(X.C. Birkenbach and R. van der Merwe)

TABLE 2

PERCENTAGE RESPONSES OF SATISFIED AND DISSATISFIED \\DRKERS

REGARDING WAGES PAID BY OTHER COMPANIES

Other companies pay
%

Satisfied

Dissatisfied
ω

Level of

significance

More 13 70 0,88 0,01

Less 22 9 0,27 N.S.

Same 4 4 0,00 N.S.

Some more, some less 26 9 0,33 0,05

Don't know 35 8 0,50 0,01

Perceptions of internal equity

These perceptions relate to persons' feelings of the fairness of their pay compared with

what other workers within the organisation earn. Results in this connection were not as clear-

cut as was the case with outside equity. Significant differences between the groups were

found in a few areas only, and the sizes of the differences were very small. Table 3 gives the

results of workers' feelings why co-workers doing similar work earned higher wages than they

did.

Table 3 shows that dissatisfied workers (albeit a very small percentage), to a larger

extent than satisfied workers, perceived that certain "negative" factors were responsible for

wage discrepancies among co-workers. Regarding the second factor, namely, others earned

TABLE 3

PERCENTAGE RESPONSES OF SATISFIED AND DISSATISFIED WORKERS

REGARDING WHY CO-WORKERS EARNED MORE WAGES

Reason
%

Satisfied

Dissatisfied
ω

Level of

significance

Foreman likes them 0 7 0,38 0,05

Because of race 0 7 0,38 0,05

more because of their race, it was found that this particularly referred to coloured workers.

Black respondents believed that coloured workers in certain jobs did the same work as they

did, but received higher wages purely because of their race.

A further difference between satisfied and dissatisfied workers emerged in connection

with the wages earned by workers doing less complex jobs. Five percent of dissatisfied

workers (ω= 0,33, p< ,5) indicated that workers doing less complex jobs earned the same

Perspectives in Industrial Psychology 1980 6.1

Black workers’ satisfaction with their pay

(X.C. Birkenbach and R. van der Merwe)

wages as they did, while none of the satisfied workers had this feeling. Although the

proportion of respondents was very small, it is nevertheless evident that the reason for

dissatisfaction was a result of perceived inequity in the sense that persons with smaller job

inputs were receiving equal outcomes.

Understanding of wage deductions

One significant difference between the two groups emerged here, namely between

respondents who did not understand any of their wage deductions. Nine percent of satisfied

workers did not understand any of their pay deductions, while thirty two percent of

dissatisfied workers fell into this category

(ω = 0,42; p < , 05).

This finding is not unexpected. When amounts are deducted for unknown reasons,

dissatisfaction becomes predictable. It would furthermore appear as if satisfied workers have a

better understanding of their companies' pay systems.

CONCLUSION

The study was undertaken to gain insight into some of the determinants of black

workers' satisfaction with their pay. Overall, from the results obtained, it appears that black

workers who are satisfied with their pay are generally younger, more educated, and have

fewer financial dependents than dissatisfied workers. In addition, they have better perceptions

of the equity of their pay and a better understanding of their companies' pay systems.

In accounting for these findings, it would seem that age is the driving variable in these

relationships, as the other factors are to a degree contingent on it. It can, for example, be

argued that younger (i.e. satisfied) workers have fewer financial dependents, which would

imply that they have more cash available for own use. It can furthermore be speculated that

younger workers on the average have more education than their older counterparts. The latter

assumption may account for a better understanding of organisational pay systems and external

market conditions, which would lead to more favourable perceptions of pay equity. Taken

together, these factors could potentially lead to greater satisfaction with pay.

It is important to point out that because of the exploratory nature of the study an in-

depth analysis of the data using multi-variate statistical procedures was not considered

feasible. Consequently, the relationships between the independent variables and pay

Perspectives in Industrial Psychology 1980 6.1

Black workers’ satisfaction with their pay

(X.C. Birkenbach and R. van der Merwe)

satisfaction reported here cannot be considered as determinants of pay satisfaction, as the

effects of other possible causative variables had not been controlled. Indeed, some of the

relationships may very well disappear if certain variables are partial led out.

Nevertheless, it is believed that a number of areas have been highlighted which could

be pursued in further research. More specifically, these areas relate to feelings of internal and

external pay equity and understanding of company pay systems. Although the results of the

study with regard to perceptions of internal pay equity did not show striking differences be-

tween satisfied and dissatisfied workers, it can be anticipated that more refined measures

would show greater discrimination between these groups.

ABSTRACT

Research in South Africa has shown that money is the most

important outcome desired by black workers in the work

situation. However, few studies have attempted to establish

which variables are related to black workers' satisfaction with

their pay. The findings of the present study suggest that workers

who are satisfied are generally younger, more educated and

have fewer financial dependents than dissatisfied workers. In

addition, they see their pay as being more equitable, and have a

better understanding of their companies' pay systems than

dissatisfied workers.

REFERENCES

Adams, J.S. Inequity in social exchange. In Berkowitz, L. (Ed.), Advances in Experimental

and Social Psychology. (Vol. 2). New York: Academic, 1965.

Backer, W. Motivating Black Workers. Johannesburg: McGraw Hill, 1973.

Birkenbach, X.C. Employee Perceptions of Organizational Remuneration Systems: A

Comparative Study of Black Employees in Four Secondary Industry Companies.

Unpublished Masters Dissertation, University of Port Elizabeth, 1978.

Birkenbach, X.C. & van der Merwe, R. Black employees perceptions of organizational pay

practices: the development and application of an instrument. Psychologia Africana.

1979, 18(1). In press.

Dyer, L. & Theriault, R. The determinants of pay satisfaction. Journal of Applied Psychology.

1976, 61, 596-604.

Goodman, P.S. An examination of referents used in the evaluation of pay. Organizational

Behavior and Human Performance, 1974, 12, 170-195.

Homans, G.C. Social Behavior: Its Elementary Form. New York: Harcourt Brace, 1961.

Klein, S.M. & Mahrer, J.R. Education level and satisfaction with pay. Personnel Psychology,

1966, 19, 195-208.

Lawler, E.E. Pay and Organizational Effectiveness: A Psychological View. New York:

McGraw-Hill, 1971.

Perspectives in Industrial Psychology 1980 6.1

Black workers’ satisfaction with their pay

(X.C. Birkenbach and R. van der Merwe)

Lawshe, C.H. & Baker, P.C. Three aids in the evaluation of the significance of differences

between percentages. Educational and Psychological Measurement, 1950, 10, 263-270.

Patchen, N. The Choice of Wage Comparisons. Englewood Cliffs: Prentice Hall, 1961.

Porter, L.W. A study of perceived need satisfactions in bottom and middle management jobs.

Journal of Applied Psychology, 1961, 45, 1-10.

Verwey. F.A. The Attitudes, Job Expectations and Motivation of Bantu Employees in

Industry. NIPR Report Pers, 165, 1968.

___________________