The Influence of Total Compensation on Job Satisfaction

Abstract

This study aims to examine the effects of several total compensation factors on job satisfaction. This cross-sectional and confirmatory research has collected data from a sample of 246 employees, including lowerlevel workers, technicians, and middle managers in manufacturing and service industries in Spain, mainly medium- and large-sized companies in the private sector. Data analysis includes reliability and validity tests of psychometric scales and hypotheses testing using multi-group Structural Equations Modelling (SEM). The study results show that supervisor support, career development, and work-life balance are strongly and positively related to job satisfaction. However, pay satisfaction is positively associated with job satisfaction only for the group of employees who are 40 years of age or younger. Managers must conceptualize these factors as part of total compensation and promote work flexibility, career development, and supervisor support policies. The results add to the small literature investigating the growing field of total compensation and its outcomes for job satisfaction and employee performance.