PAY SATISFACTION UNDER A MERGED-TIER COMPENSATION SYSTEM: A LONGITUDINAL STUDY OF REGISTERED NURSES (MERGED TIER COMPENSATION).
Contributors: University of Kentucky.
Published: 1994
Number of pages: 109
Subjects: Business Administration, Management.; Health Sciences, Nursing.
Description: The use of multiple pay tiers is an attempt to limit or cut payroll costs over time by placing highly comparable employees onto different pay progressions according to criteria unrelated to individual performance (e.g., date of hire or geographic location). Over time, members of the lower pay tier often experience dissonance due to their perceptions of inequitable treatment. Many organizations that embraced pay tiers in the past have found this compensation program to be prohibitively expensive when unintended outcomes such as turnover and absenteeism are factored into the cost-benefit analyses. Consequently, some tiered pay systems are being dismantled in the hope of improving employee attitudes and performance.

Within a longitudinal research design involving public health nurses, this study utilized distributional equity theory to investigate (1) the presence and nature of inter-tier differences in pay satisfaction and (2) whether the merging of pay tiers resulted in changes to pay satisfaction levels among the study's respondents. Multiple analysis of covariance (MANCOVA) procedures were used to measure inter-tier differentials as well as any across-time changes in pay satisfaction attributable to the intervention.

The results of this research indicated widespread improvement in pay satisfaction levels for both tier groups between Time 1 and Time 2. However, hypothesized relationships involving significant inter-tier differentials between both pay tier groups were not supported by the data. Ultimately, a "recession effect" was hypothesized as a potential contributor to the systemic improvements in pay satisfaction. Limitations of this study as well as suggestions for future research are discussed as well.
Notes: Source: Dissertation Abstracts International, Volume: 55-04, Section: A, page: 1026.

Thesis (PH.D.)--UNIVERSITY OF KENTUCKY, 1994.

School code: 0102.