THE RELATIONSHIP BETWEEN JOB-SATISFACTION AND MANAGERIAL REMUNERATIONIN SMALL AND MEDIUM-SIZED ENTERPRISES - AN EMPIRICAL-TEST OF COMPARISON INCOME AND EQUITY THEORY HYPOTHESES

The relationship between job satisfaction levels and the remuneration of non-owner managers employed by a sample of 97 UK small and medium s ized enterprises (SMEs) is investigated. The main empirical findings a re that relative remuneration levels appear to be largely explained by differences in human capital and job/firm characteristics and that jo b satisfaction is positively related to deviations from these estimate d comparison-income levels. Moreover, the equity theory expectation th at individuals with the least prospect of redressing payment inequitie s will have the greatest incentives to respond to payment inequities b y cognitive adjustment is also supported. The results indicate that jo b satisfaction levels for individuals expecting to remain in their cur rent post are not significantly affected by current payment inequities . For those managers who expect to move firms, the amount of payment i nequity has a significantly positive effect upon their job satisfactio n.