Beyond the paycheck: How empowerment and compensation shape employee satisfaction

By J. N. HALM

A December 2024 article on the Forbes magazine website on the highest-paying jobs truly makes for interesting reading. As was to be expected, the usual “suspects” are on that list. Physicians, Medical Directors, Software Engineers, and Chief Financial Officers (CFOs), among others.

However, among the jobs that pay the most in 2025 is a Veterinarian Radiologist. I never expected to find that on the list. Who would have thought that performing diagnostic imaging tests to enable the best treatment for pets would pay so much? But that tells you how much we love our pets.

I am well aware that many other high-paying jobs might not be on that list for one reason or another. I expected to find astronauts high up the list, but apparently, they do not earn as much as I thought.

But the question is this: Is finding a job all about the money one would make?

Money makes the world go round, or so the saying goes. However, when it comes to job satisfaction, the story is far more complex than just the figures on a paycheck.

While compensation remains a crucial factor in employee satisfaction, research has increasingly shown that other elements, particularly employee empowerment, play equally significant roles in determining how satisfied employees are with their jobs.

The relationship between employee satisfaction and workplace performance has long been a subject of interest for both practitioners and academics. A 2020 study conducted in Indonesia shed new light on how different factors, particularly empowerment and compensation, contribute to overall job satisfaction.

The results of this particular study were delivered at the IC-HEDS 2019 International Conference on Humanities, Education, and Social Sciences. The title of the paper was “The Effect of Empowerment and Compensation on Job Satisfaction of Academic Staff at Universitas Negeri Malang”. The findings present some interesting insights that organisations should consider.

As a concept, job satisfaction encompasses various elements that contribute to an employee’s overall contentment with their work situation. These elements can be categorised into monetary and non-monetary factors.

The monetary aspects primarily revolve around Compensation, which includes salary, bonuses, and other financial benefits. The non-monetary aspects include what experts refer to as Employee Empowerment, which encompasses job independence, decision-making authority, and trust from superiors.

Research has identified several key components that contribute to job satisfaction. These include promotion opportunities, job security, working conditions, relationships with colleagues, relationships with superiors, and even company characteristics.

However, what makes the recent study particularly interesting is its focus on the interplay between empowerment and compensation, and how these two factors work together to influence employee satisfaction.

Employee Empowerment has been defined by experts as the process of enabling employees to think, behave, act, and control their work and decision-making in autonomous ways. It is about giving employees the authority to make decisions and take action in their daily activities without having to seek approval from immediate superiors. When employees are empowered, they are trusted to use their judgment and expertise to handle situations as they see fit.

Through carefully designed questionnaires, the researchers were able to gather data that helped them understand how different levels of empowerment and compensation affected employee satisfaction levels.

One of the most significant findings of the study was that the impact of employee empowerment and compensation was quite substantial. However, what made the findings particularly interesting was the revelation about how empowerment could be maximised. The research showed that employee empowerment reached its peak effectiveness when employees were given complete trust to carry out their work responsibilities.

The study revealed that Trust-Based Empowerment was particularly effective in enhancing job satisfaction. When employees feel that their superiors trust them to make decisions and handle their responsibilities without constant oversight, their sense of job satisfaction increases significantly. This finding aligns with previous research that has shown that autonomy and trust are crucial elements in creating a positive work environment.

Nothing beats that feeling of knowing that your boss has absolute trust in you. It feels so good. I once worked for a manager like that who made it a point to refer to all his staff by the term “Manager” whenever he gave you a task. Just that one word was enough to make you feel great about yourself. Empowerment makes employees believe in their self-worth. It is the superior’s way of telling the employee that he or she has what it takes to make it on the job.

However, the research also emphasised that empowerment alone is not enough. The study found that compensation must meet employee expectations for optimal job satisfaction. This brings to light what experts refer to as Compensation Adequacy, which is the extent to which employees feel their compensation package matches their contributions and meets their needs.

The findings from this research have significant implications for how organisations should approach employee satisfaction. First and foremost, it suggests that organisations need to take a balanced approach, paying attention to both empowerment and compensation. Simply focusing on one while neglecting the other might not yield the desired results. In short, a satisfied employee is not only empowered to make decisions but is also paid well.

For instance, an organisation might offer competitive salaries but maintain a rigid, hierarchical structure where employees have little autonomy. In such cases, despite the good pay, employees might still experience lower job satisfaction due to the lack of empowerment.

There are many examples of individuals leaving well-paying jobs, simply because the job did not come with the empowerment expected. If you have a boss who insists that you double-check every single decision you take with him, you will become frustrated, no matter how much you earn monthly.

Conversely, an organisation might offer great autonomy and trust but fail to provide adequate compensation, which could also lead to dissatisfaction. I have found that a situation like that can be very frustrating as well.

This is because the employee who is given the power to make decisions feels he or she is contributing directly to the money being made by the business. When such an employee does not feel like he or she is being compensated for all the work being put in, frustration is inevitable. In other words, money might not be everything, but money is also very important.

The research also highlighted the importance of what can be termed Empowerment Culture. This refers to an organisational culture where trust and autonomy are not just buzzwords but are deeply embedded in how the organisation operates.

In such cultures, employees are not just given the authority to make decisions but are also supported when they do so. I once worked under a CEO like that. Every task was a great learning experience because he gave you all the support you needed.

It is worth noting that the implementation of these findings requires careful consideration of various factors. For instance, the level of empowerment might need to vary depending on the nature of the job, the experience level of the employee, and the potential impact of decisions. Similarly, compensation packages need to be structured in a way that is both fair and sustainable for the organisation.

From the ongoing discussion, it is clear that job satisfaction is a complex construct that requires a multi-faceted approach. Organisations need to strike the right balance between empowerment and compensation to create an environment where employees can thrive and feel satisfied with their work situation.

The findings from this research provide valuable insights for organisations looking to enhance employee satisfaction. By understanding that both empowerment and compensation play crucial roles, organisations can develop more effective strategies for creating a satisfied and productive workforce. After all, in today’s competitive business environment, having satisfied employees is not just a nice-to-have; it is a must-have!

The post Beyond the paycheck: How empowerment and compensation shape employee satisfaction appeared first on The Business & Financial Times.

Read Full Story