Pay Transparency, Procedural Justice, and Employee Performance:The Moderating Role of Supervisor Trust

Nurwati; Arsyat; Hartini Yuliati; Amaliyana Tendriawaru Anas; Ryan Pratama Mandala Putra

doi:10.55927/qsabfd72

Authors

Nurwati Universitas Haluoleo Author
Arsyat Universitas Haluoleo Author
Hartini Yuliati Universitas Haluoleo Author
Amaliyana Tendriawaru Anas Universitas Haluoleo Author
Ryan Pratama Mandala Putra Universitas Haluoleo Author

DOI:

https://doi.org/10.55927/qsabfd72

Keywords:

Pay Transparency, Procedural Justice, Supervisor Trust, Employee Performance, Moderated Mediation

Abstract

This study examines whether procedural justice mediates the effect of pay transparency on employee performance, and whether supervisor trust moderates this mediated pathway. A cross-sectional survey was administered to 117 permanent employees in the service sector (banking, telecommunications, modern retail, consulting) in the Greater Jakarta metropolitan area. Data were analysed using Partial Least Squares Structural Equation Modelling (PLS-SEM) with bootstrapping (5,000 sub-samples) and an index-based test of first-stage moderated mediation. Pay transparency exerted a positive effect on procedural justice (β = 0.483, p < .001), which in turn positively predicted employee performance (β = 0.521, p < .001). Procedural justice significantly mediated the pay-transparency–performance relationship (indirect effect = 0.252, 95% CI [0.142, 0.362]). Supervisor trust amplified the transparency–justice pathway (β_interaction = 0.287, p < .001) and strengthened the overall indirect effect (index of moderated mediation = 0.149, 95% CI [0.035, 0.263]). A cross-sectional design limits causal inference; common method bias cannot be fully ruled out despite procedural and statistical controls; the sample is restricted to Jabodetabek's service sector. Organisations implementing pay transparency must invest simultaneously in supervisor-trust building. Low trust does not justify withholding transparency; rather, carefully communicated transparency can itself serve as a trust-building mechanism over time

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