How Do Income and Its Components and Perception Relate to Alienation?

This study examines the relationship between individuals' financial reality and alienation-a psychological state that negatively affects employee performance. Using hierarchical regression to analyze 311 questionnaires completed by full-time employees, income-related variables were found to explain a substantial part of the variance in alienation. A negative relationship between income and alienation was identified, but was moderated by the value that individuals attributed to money and was related to pay satisfaction. Pay composition had an independent effect on alienation: Higher control over amount of income and a recent increase in income were related to lower levels of alienation beyond the effect of income level. Potential practices to reduce alienation include spreading wage increases, enhancing pay transparency, and linking pay to performance.