Effects of minimum wage policy implementation: Compensation, work behaviors, and quality of life

• Published in: International journal of hospitality management 2019-08, Vol.81, p.229-238
• Main Authors: Che Ahmat, Nur Hidayah, Arendt, Susan W., Russell, Daniel W.
• Format: Article
• Language: English
• Subjects: Hotel; Malaysia; Minimum wage; Pay satisfaction; Quality of life; Turnover; Work engagement; Work motivation
• ISSN: 0278-4319; 1873-4693
• DOI: 10.1016/j.ijhm.2019.04.019

•Employees perception of minimum wage policy impacted compensation satisfaction.•Compensation influenced work motivation, job satisfaction, and quality of life.•Motivation, engagement, and overall satisfaction mediated some relationships. This study develops and tests a research model to analyze the overall effects of minimum wage policy implementation on hotel employees’ overall perception of the minimum wage policy in relationship to satisfaction with compensation, work behaviors, and perceived quality of life. An electronic survey was developed, and data were collected from hotel employees who worked at three-, four-, and five-star hotels in Malaysia. Results from the structural equation modelling analysis and the bootstrap mediational effects analysis offered significant empirical findings that will enable understanding of the overall effects of minimum wage increases on Malaysian hotel employees. Employee perception of minimum wage policy significantly influenced their satisfaction with compensation and work motivation. Additionally, employee satisfaction with compensation significantly influenced their work motivation, job satisfaction, and perceived quality of life. Limitations and future research directions are discussed.