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What Is the Relationship Between the Salary and Job Satisfaction for Fresh Graduate?

Autor:   •  December 3, 2018  •  Term Paper  •  1,113 Words (5 Pages)  •  115 Views

Page 1 of 5
  1. Title

To discuss the relationship between the salary and job satisfaction for fresh graduates.

  1. Introduction
  1. Statement of the problem

What is the relationship between the salary and job satisfaction for fresh graduate?

  1. Literature review


The median starting salary for 2012 graduates is up by 4.5 percent over the Class of 2011, ac- cording to the latest Salary Survey report from the National Association of Colleges and Employers (NACE). Research finds that workers in public and non-profit organizations are motivated by intrinsic rewards, such as serving the public than by extrinsic rewards, such as salaries and other monetary benefits, compared to workers in for-profit firms (Lewis and Frank 2002; Light, 2002). Although the notion that high pay leads to high levels of job satisfaction is not without debate (Judge, 2010), research often finds that a person’s overall job satisfaction, not just one’s satisfaction with pay, is associated with the pay level than not (Liu, Thomas, and Zhang, 2010). Specifically, studies report that employees in the for-profit sector are highly motivated by extrinsic benefits such as salary (Crewson, 1997; Rainey, 1983; Wittmer, 1991).


The human capital theory (Becker, 1964) argues that individuals with the highest human capital (education, experience, training, etc.) are most productive and find jobs with a better fit with their education, which leads to higher salaries and job satisfaction (Allen and De Weert, 2007). Credentialism theory, on the other hand, argues that education in and of itself is not a determinant of salary; however, highly educated individuals tend to get placed in better jobs despite the skill set required in a job (Collins, 1979). The job-match theory builds on the criticisms of human capital and credentialism theories to suggest that education–job match can result in employees finding jobs that match their skills and knowledge, thus providing them with a sense of usefulness and security, ultimately leading to higher job control and job satisfaction (Jovanovic, 1979; Sørensen and Kalleberg, 1981; Van De Werfhorst, 2002). Therefore, working on a job that matches one’s education may wield greater influence over the overall job satisfaction of public and non-profit employees, who derive more satisfaction from doing an activity itself. Monks (2000) examined the wage gains that accrue from attending a high quality university when controlling for individual ability and labour market experiences. He found that graduates from highly selective universities earn significantly more than do graduates from less selective institutions (Jisun Jung and Soo Jeung Lee, 2016). Bedi and Edwards (2002) also estimated the strong positive effects of school quality on the earnings of university graduates (Jisun Jung and Soo Jeung Lee, 2016). Grubb (2005) proposes three tiers of higher education: universities that are older, have higher status, have stronger research performance and are highly selective; universities that are younger and have lower status; and nonuniversity tertiary institutions (Jisun Jung and Soo Jeung Lee, 2016).


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