Impact of Retirement System on Job Satisfaction and Loyalty: A Case of the Salary Peak System

Abstract

The salary peak system, developed as a replacement for the early retirement system, provides properties such as extension of the retirement age, decreased salary, and/or changes of job position. The purpose of this study is to explore the perceived attitudes toward the salary peak system, as well as job performance, satisfaction, and loyalty. In particular, this study investigates i) the effects of monetary variables (e.g., salary, incentive, pension); ii) the effects of the non-monetary variables (e.g., word of mouth, position, perceived job importance, organizational commitment); iii) the effects of overall attitudes on job performance; iv) the effects of job performance on satisfaction; and v) effects of satisfaction on loyalty. This study applied various theories and models to explain job performance, satisfaction, and loyalty. In order to measure the findings, this paper conducted surveys and applied statistical analysis using factor analysis and regression. The result provided consideration on old worker’s job motivation, satisfaction, and loyalty or intention to leave regarding how to apply the system. This study provides implications for management and public policy for a retirement system. This study suggests the need for the development of effective management and public policies for the salary and retirement system without decreasing motivation, satisfaction, and loyalty.