Higher Education Compensation Policies and Their Impact on Academic Staff Performance: A Rasch Model Approach to Policy Implications in Indonesian Universities

Abstract

Compensation policies in higher education are pivotal in shaping faculty motivation, institutional commitment, and overall academic productivity. However, disparities in compensation structures across public and private universities, employment categories, and regional contexts pose significant challenges to equity and performance in the academic sector. This study employs the Rasch Model, a robust psychometric approach, to examine how compensation policies influence academic staff performance in Indonesian universities. Utilizing a large-scale survey of 1,416 faculty members and academic support staff, the findings reveal that perceived compensation fairness is a key determinant of job satisfaction, research engagement, and institutional loyalty. Results indicate that structured, performance-based compensation models enhance faculty retention and productivity, while disparities in salary schemes contribute to dissatisfaction and increased turnover intentions. The study underscores the urgent need for policy reforms that integrate transparent salary frameworks, competitive financial incentives, and alignment with international benchmarks to ensure sustainable faculty engagement and institutional excellence. These insights provide critical implications for policymakers, university leaders, and higher education governance bodies in designing more equitable and performance-driven compensation systems.