Performance-based Reward Administration Enhancing Employees’ Feelings of Interactional Justice

The transformation in international business landscape has changed organizational management especially reward administration. This is done in order to maintain the organization’s competitiveness in global market place. In the field of reward administration, an emerging trend can be observed whereby most organizations are moving toward the application of psychological elements in administering organizational reward system. The ultimate objective of this study is to investigate the association between performance-based reward administration and interactional justice. The proposed model was empirically tested using a sample of 113 employees from fire and rescue agency in Peninsular Malaysia. This study found an evidence that performance-based reward administration (i.e., communication, participation and performance appraisal) is positively and significantly associated with interactional justice. This findings proves that the ability of administrators to appropriately implement communication openness, inspire participative decision-making and organize fairness performance appraisal in administering performance-based reward have significantly evoked the feeling of interactional justice when employees perceived that they are being fairly treated in the reward system.