Understanding Pay Satisfaction: Effects of Supervisor Ethical Leadership on Job Motivating Potential Influence

Traditionally, research focused on determining the causes of employee pay satisfaction has investigated the influence of job-related inputs, both extrinsic and intrinsic to the job itself. Together with these inputs, pay-related fairness issues have played an important role in explaining the phenomenon. However, few studies consider the factors linked to fairness issues, such as ethical leadership. Because ethical leadership necessarily entails the concept of fairness, it seemingly should have a positive effect. Furthermore, because the presence of supervisor ethical leadership (SEL) offers strong chances for employees to achieve moral accomplishments and excel in the practice of their jobs, SEL should enhance the effects of intrinsic job inputs. Whereas high job motivating potential (JMP) makes it easier for employees be self-actualized, moral fulfillment is necessary for them to obtain authentic self-actualization at work and minimize the impact of pay deficiencies. Along with SEL, JMP should be shaped to increase positive experiences of job meaningfulness, responsibility for job outcomes, and knowledge of results at work, which can lead to enjoyment in doing the job in itself, not just for compensation-related motives. Hierarchical regression analysis with a sample of 151 employees in a diverse set of Spanish organizations supports the direct effects of JMP and SEL and shows that higher levels of SEL increase the positive effects of JMP on pay satisfaction. The practical implications of these findings and further research directions conclude this article.