PAY TRANSPARENCY AND ORGANIZATIONAL TRUST IN INSURANCE COMPANIES IN PORT HARCOURT, RIVERS STATE, NIGERIA

Abstract

This study examines the relationship between pay transparency—specifically pay communication and pay accessibility—and organizational trust among employees in insurance firms in Port Harcourt, Rivers State, Nigeria. A cross-sectional quantitative correlational design was employed, with data collected from 168 employees using a structured questionnaire adapted from validated instruments. Stratified random sampling ensured proportional representation across firms, and all measurement scales demonstrated acceptable reliability (Cronbach’s α > 0.70). Data were analyzed using IBM SPSS version 23.0, and Spearman’s rank-order correlation was used due to the ordinal nature of the Likert-scale data. Findings revealed statistically significant positive relationships between pay communication and organizational trust (ρ = .414, p = .012), and between pay accessibility and organizational trust (ρ = .286, p = .001). These results underscore the pivotal role of pay transparency in fostering trust, commitment, and psychological safety within organizations. The study concludes that transparent pay practices—through clear communication and timely, accessible compensation—significantly enhance employee–organization relationships and contribute to improved organizational stability and performance. As such, it is imperative for insurance firms and similar organizations to prioritize transparent remuneration strategies as a core aspect of human resource management. Accordingly, the study recommends enhancing pay communication through consistent multi-channel messaging, improving payroll systems for timely access, and establishing formal feedback mechanisms to address compensation-related concerns. These measures can strengthen organizational trust and engagement, particularly in emerging-market contexts such as Nigeria’s insurance sector.