This paper explores employees’ understanding of fairness in the area of compensation and performance management in the Australian financial services industry and how these perceptions influence organizational commitment and turnover intention. A survey of 345 employees was conducted in 2005 and analyzed using structural equation modeling (SEM). The analysis yielded four new perceived fairness of HRM dimensions, namely structural fairness of compensation, social fairness of compensation, structural fairness of performance, and social fairness of performance. It is largely how HRM practices are communicated to employees that influence their work related outcomes. The implementation of HRM practices may or may not foster employees’ commitment or reduce their thought of leaving. Rather, fairness perceptions in HRM practices may be moderated by the way fairness is communicated. The understanding and acknowledgement of the importance of employee fair treatment will help organizations avoid unfair HRM practices.
|Keywords:||Fairness, HRM, Organizational Commitment, Turnover Intention, Australian Banking Industry|
Lecturer, School of Management, University of Science, Malaysia, Penang, Penang, Malaysia
Adjunt Associate Professor, Division of Business, University of South Australia, Adelaide, South Australia, Australia
Senior Lecturer, Division of Business, University of South Australia, Adelaide, South Australia, Australia
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