Beyond the Paycheck : The Critical Role of Psychosocial Factors in Shaping Employee Outcomes

Performance-based pay is often assumed to contribute to positive employee outcomes; hence its contribution may also be determined by other factors. This study explores how pay, pay-setting justice and psychosocial factors contribute to employee outcomes (intention to stay, task performance and intrinsic motivation). Cross-sectional questionnaire data were obtained from 336 employees from sub-sample of white-collar workers from a large industrial company in Sweden. Results of hierarchical multiple regression analyses revealed that pay did not contribute to the employee outcomes. Among justice dimensions only procedural justice was found positively related to intrinsic motivation. The results concerning psychosocial factors were more in line with existing literature and theory, where autonomy and goal clarity were positively related to all three outcomes, but feedback was only positively related to intrinsic motivation. This study highlights the importance of incorporating psychosocial factors alongside pay and justice dimensions when designing effective strategies to enhance employee outcomes. The limitation includes that further research should focus on obtaining more recent data and adding multiple countries to investigate whether these results apply to different populations for the broader applicability of the findings.