Pay Satisfaction of Software Professionals in India

Abstract

This study explores pay satisfaction-related issues of software professionals in India, specifically assessing the impact of different dimensions of pay satisfaction on intent to leave. Since satisfaction with pay is an emotional/affective reaction and is likely to be influenced by personal and environmental factors, the study explores some social psychological processes like leader-member exchange, justice, and voice that are likely to impact pay satisfaction of these professionals. Using a sample of 306 software professionals drawn from various organizations, the study tests the various hypotheses. Three broad trends emerge from the data: First, process dimensions of pay satisfaction are better predictors of the professionals' intention to leave the organization. Second, distributive justice predicts both the amount and process dimensions of pay satisfaction whereas procedural justice predicts only the process dimensions. Finally, the hypothesis that LMX leads to voice which leads to procedural justice which in turn leads to satisfaction with the process dimensions of pay satisfaction found support from the data and the strength of relationships was stronger for structure and administration dimension as compared to raises dimension of pay satisfaction. The findings suggest that though pay levels are important, the HR Department needs to make additional efforts towards the processes through which pay and raises are determined as these processes might provide the crucial advantage for retaining software professionals in an environment where salary levels are competitive. Additionally, since both the pay-related processes and procedural justice are important, these processes need to be both effective and fair. Though fairness in appraisal and pay- related processes can be built through various HR systems like participation (voice), the results show that these processes will be effective only if they are implemented well by the immediate leader. The results have implications for leadership development and training on appraisal and pay-related processes. Unless the leaders are trained appropriately and made aware of the social psychological processes that go on in a team, the design of systems by the HR Department may not be effective. Since distributive justice is an important predictor of pay satisfaction, comparison with relevant others plays an important role in pay satisfaction. The HR Departments in these organizations needs to identify pay levels that compete in the market. Indians are shown to have a familial identity and value the opinions of their kith and kin; hence, acknowledging and incorporating the inputs of social comparison person (family and friend) might provide more useful insights into how these professionals perceive distributive justice.