The impacts of human resource management practices and pay inequality on workers' job satisfaction

In this paper we investigate the relationship between Human Resource Management (HRM) practices and workers' overall job satisfaction and their satisfaction with pay. To investigate these issues we use British data from the 'Changing Employment Relationships, Employment Contracts and the Future of Work Survey' and the 'Workplace Employment Relations Survey'. After controlling for personal, job and firm characteristics, it is shown that several HRM practices raise workers overall job satisfaction and their satisfaction with pay, but these effects are only significant for non-union members. Satisfaction with pay is higher where performance-related pay and seniority-based reward systems are in place. A pay structure that is perceived to be unequal is associated with a substantial reduction in both non-union members' overall job satisfaction and their satisfaction with pay. Although HRM practices can raise worker job satisfaction, if workplace pay inequality widens as a consequence then non-union members may experience reduced job satisfaction.