Abstract

This study was conducted to examine the influence of interactional justice in the relationship between
performance based pay and job satisfaction using 334 usable questionnaires gathered from employees who work
in Malaysian private institutions of higher learning (PRIVATE INSTITUTION), Malaysia. Exploratory factor
analysis confirmed that the measurement scales used in this study met the acceptable standards of validity and
reliability analyses. Further, the outcomes of Stepwise Regression analysis showed two important findings: First,
performance based pay (i.e., participation in pay systems and adequacy of pay) significantly correlated with job
satisfaction. Second, linking performance based pay (i.e., participation in pay systems and adequacy of pay) to
interactional justice significantly correlated with job satisfaction. Statistically, this result demonstrates that
interactional justice does act as a partial mediating variable in the relationship between performances based pays
and job satisfaction in the studied organizations. In addition, discussion, implications and conclusion are
elaborated.

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