Compensation Equity and Employee Commitment in the Digital Workplace: Examining the Mediating Role of Job Satisfaction and Employee Engagement

The digital transformation of employment relations has generated significant theoretical and practical questions regarding how compensation structures influence employee attitudes and behaviours in technology-mediated work environments. This study examines the relationship between compensation equity and organisational commitment among employees in digitally enabled service organisations, with particular attention to the mediating roles of job satisfaction and employee engagement. Grounded in Adams's (1963) Equity Theory and Blau's (1964) Social Exchange Theory, the study adopts a quantitative survey research design. Data were collected from a stratified random sample of 342 employees drawn from banks, telecommunications firms, and technology companies in Rivers State, Nigeria, using validated psychometric instruments. Structural equation modelling (SEM) with the bootstrapping procedure was employed for mediation analysis. Findings reveal that compensation equity exerts a significant positive direct effect on organisational commitment (β = 0.31, p < .001), and that this relationship is substantially mediated by both job satisfaction (indirect effect = 0.19, 95% CI [0.12, 0.27]) and employee engagement (indirect effect = 0.16, 95% CI [0.09, 0.24]). The study contributes to employment relations theory by demonstrating that perceptions of compensatory fairness operate through attitudinal and motivational pathways before translating into committed behaviour, and offers actionable recommendations for human resource practitioners navigating the challenges of compensation governance in the digital workplace.