Initially, financial well-being was measured from an economic perspective, equating it to income (Easterlin, 1974). Economic measurements, however, lack the means to account for quality of life, and psychology accurately allows for the development and improvement of appropriate measures to assess well-being directly and to design interventions to increase it (Diener & Seligman, 2004). Little information in the literature exists on subjective financial well-being, and current research suggests that financial well-being is a multidimensional construct that would be interesting to test different predictions for future positive development (Sorgente & Lanz, 2019).

In a large sample study with South African employees in different sectors, Vosloo et al. (2014) established a strong positive relationship between SWR and subjectively measured financial well-being. Additionally, Grable et al. (2012) found that perceived income adequacy was positively associated with financial satisfaction. Similarly, financial stress negatively correlated with pay satisfaction in a study conducted by Kim and Garman (2004). Our delineation of PFW as a dual measure of an individual’s self-perceived satisfaction with financial strengths and difficulties or personal resources and personal demands fits the theoretical approach of the JD-R model and COR theory, and supports the findings from our model. Based on these arguments and in line with Schaufeli and Taris’ (2014) proposal that resources and demands could load as separate factors because of demands being valued negatively and resources being valued positively, the researchers hypothesised the relationships with SWR with two measures of PFW, namely positive personal financial well-being (PPFW) and negative personal financial well-being (NPFW) as follows in the proposed study:

Sense of coherence (SOC), a psychological resource or personal resource is positively related to financial well-being, regardless of the level of income (Barnard, 2016). Antonovsky (1979) described SOC as:

Feldt et al. (2011) described SOC as a latent construct facilitating thriving and coping under challenging circumstances. Barnard (2016) found that a stronger SOC positively affects South African employees’ financial well-being and is positively associated with managing debt better and planning better for retirement. Antonovsky’s (1979) psychological construct definition of the Sense of Coherence (SOC) relates to confidence in the positive outcome and predictability of internal and external environments. This concept is comparable to self-efficacy, which Bandura (1977) defines as the confidence an individual has in their ability to achieve positive outcomes. This comparison will be further explained.

Bandura (1977) initially defined self-efficacy and referred to perceived self-efficacy (also known as efficacy expectations) as ‘the conviction that one can successfully execute the behaviour required to produce the outcomes’ (p. 193). Sturr et al. (2021) utilised questions from the financial self-efficacy scale (FSES) and measured self-efficacy as a latent variable by incorporating the individual components of self-efficacy identified by Bandura (1977). More recently, Van Diemen et al. (2020) described self-efficacy slightly differently regarding individuals’ confidence in their ability to accomplish specific tasks and behaviours within a particular context.

Vosloo et al. (2014) showed a strong positive relationship between personal financial efficacy (PFE) and financial well-being and defined PFE as ‘a person’s satisfaction with/confidence in his/her level of financial knowledge and his/her ability to meet financial objectives’ (p. 1457). More recent research showed that financial self-efficacy was positively related to financial well-being via positive financial behaviours (Dare et al., 2023). In the proposed study, PFE was defined by Afriforte’s (2016) corresponding definition as: ‘The confidence individuals have in their financial management capability and capacity to achieve financial goals’ (p. 1). The researchers’ hypothesis indicated a positive relationship between PFE and PPFW and a negative relationship between PFE and NPFW:

Financial stress negatively correlated with workplace performance factors such as pay satisfaction, work time use, and absenteeism in a study by Kim and Garman (2004), where they conceptualised financial stress ‘as the subjective perception of one’s personal finances’ (p. 70). The relationship between financial stress and organisational commitment (negative association) and absenteeism (positively correlated) was also found, and effective workplace financial education programmes were recommended to employers (Kim & Garman, 2003). Financial stress and pressures on personal finances were shown to ‘interfere’ with employees’ work life by negatively influencing performance at work (Vosloo et al., 2014). Jansen van Vuren et al. (2018) found a robust negative relationship between general financial well-being, personal financial interference (FI), and absenteeism. Jansen van Vuren (2015) interpreted interference ‘as the prevention; or the level of disruption of a process from flowing fluently’ (p. 58). In the current study, FI is ‘the extent to which an employee’s personal financial situation interferes with their performance and overall functioning at work’ (Afriforte, 2016, p. 1).

Financial interference can thus be seen as a ‘negative distraction’ and exerts a demand on the job where personal money matters affect employees and their ability to perform their job-related duties. A negative relationship was hypothesised between PPFW and FI and, in turn, a positive relationship between NPFW and FI:

Only one study in the literature reported on FI (Jansen van Vuren, 2018). Results of the study showed that a statistically negative relationship existed between financial well-being and FI. Since a strong positive relationship was found between SWR and personal financial well-being in the study by Vosloo et al. (2014), a negative relationship was posited between SWR and FI:

Cognitive processes and external factors reinforce behaviour (Rotter, 1966). The degree to which people attribute behaviour or ‘actions’ to external factors is called external locus of control (ELOC). Results from the study of Taylor et al. (2017) demonstrated that the relationship between ELOC and money disorders (e.g., compulsive buying) was stronger than indicated in previous research. Money disorders can reasonably be expected to create FI with an employee at work. Since money disorders, such as compulsive buying, could conceivably cause FI, the difference between ELOC and internal locus of control (ILOC) and the latter’s similarity with self-efficacy are considered. If a person perceives that an event is contingent upon the individual’s behaviour or dependent on their own relatively stable characteristics, this belief is termed ILOC. Phillips and Gully (1997) found that persons with more ILOC will have higher self-efficacy than those with higher external locus. ILOC is closely associated with self-efficacy. This relationship becomes clear when comparing ILOC with self-efficacy. Bandura (1977) described this as the confidence to produce the required behaviour to achieve desired outcomes within a specific context. In this case, the context is financial, referring to Personal Financial Efficacy (Van Diemen et al., 2020). A negative relationship was therefore hypothesised to exist between PFE and FI:

Positive personal financial well-being and FI were hypothesised to act as serial mediators that explain the relationships between SWR and burnout, and correspondingly with PFE and burnout. Baron and Kenny (1986) indicated that a variable functions as a mediator to the extent that it explains the relationship between the predictor and the criterion. Positive personal financial well-being, and the seemingly opposite side of the same coin financial interference - has an association with financial strain and is considered a threat to resources (COR theory; Hobfoll, 2001), was investigated in relationship with burnout. Job demands are associated with burnout (Demerouti et al., 2001). From the defined and hypothesised variables, it is clear that ‘positively valued’ resources, such as personal resources (such as perceived SWR, PFE and PPFW), can impact and allow one to manage work conditions effectively (Hobfoll & Shirom, 2001), as well as the opposite impact of ‘negatively valued’ effect of FI.

Üngüren et al. (2024) also analysed variables in a context based on COR theory (Hobfoll, 2001), where individuals endeavour to protect, develop and accumulate more resources to mitigate work stress. They found employees who have no other income apart from their job (i.e., high levels of financial dependence) and even where the level of work-related burnout is high, the situation does not cause turnover intention. In the current study, however, the authors analysed which resources could mitigate the threat of burnout as a job demand, more precisely, whether SWR had an indirect relationship to burnout through PPFW (and whether SWR’s indirect relationship to burnout through NPFW) and FI in an indirect relationship (as mediators in serial); see Figure 1.

Sabri et al. (2020) used Bandura’s self-efficacy theory as one of three to derive their theoretical framework to support their conceptualisation of higher financial well-being being ‘one of the major goals of an employee, and increased self-efficacy is [an] important [resource] to achieve the goal’ (p. 893). They found a moderate positive correlation between self-efficacy and financial well-being in a sample of 590 employees. Therefore, the authors investigated if PFE could mitigate the threat of burnout to well-being, more specifically, if PFE had an indirect relationship to burnout through both PPFW and FI in serial (see Figure 1):

A quantitative research design was utilised in the study. Struwig et al. (2001) stated that quantitative research involves large samples, and data are collected in a structured manner using several procedures. Additionally, a cross-sectional research approach was implemented to collect the data on the population at a particular moment in time, and this approach is well positioned to inform if variables in which one is interested are related, and it can help to rule out a multitude of potential alternative explanations for why variables are related (Spector, 2019). Finally, this survey design was utilised because of its application regarding instrument validation (De Vos et al., 2011).

This study received ethics approval from the Economic and Management Sciences Research Ethics Committee of the North-West University (Reference number: NWU-00438-17-A4).

The suggested measurement model was tested and found to fit the data well. Specifically, the fit statistics showed the following: χ² = 1450.15; degrees of freedom (df) = 585; CFI = 0.924; TLI = 0.918; RMSEA = 0.053; SRMR = 0.064. Therefore, this model was used, and the remaining results from the structural model (see Figure 1) are presented with this model as the foundation. The factor loadings are presented in Table 2.

All factor loadings in the model were significant (p < 0.001), and most of the factor loadings were 0.70 or above, with only four factor loadings that were below 0.50 (Hair et al., 2016). The composite reliability estimates showed that all latent factors were acceptable, with FI being borderline but still acceptable (0.69). The Cronbach’s alpha coefficients were also generated and given on the diagonal in brackets in Table 3.

As can be seen from Table 3, all correlations were in the expected directions. Notably, PPFW and NPFW were moderately correlated in line with our expectations that these are different concepts (r = –0.37; medium effect). Positive personal financial well-being was strongly correlated with PFE (r = 0.78; large effect) and SWR (r = 0.80; large effect). Interestingly, PPFW only had a small negative correlation with burnout (r = –0.18; small effect), but NPFW had a moderately strong positive correlation with burnout (r = 0.48; medium effect). Financial interference was strongly positively correlated with both NPFW (r = 0.84; large effect) and burnout (r = 0.58; large effect). Satisfaction with remuneration had a strong positive correlation with PPFW (r = 0.80; large effect) and a moderate negative correlation with NPFW (r = –0.40; medium effect). Furthermore, SWR negatively correlated with FI (r = –0.31; medium effect).

The structural paths were added to the measurement model. Table 4 and Figure 1 present the resulting path estimates.

The structural paths showed that SWR had a positive effect on PPFW (β = 0.55, SE = 0.03, p < 0.001) and a negative effect on NPFW (β = –0.35, SE = 0.05, p < 0.001) – supporting H1. Furthermore, PFE had a positive effect on PPFW (β = 0.51, SE = 0.03, p < 0.001) and a negative effect on NPFW (β = –0.13, SE = 0.05, p < 0.001), as predicted with H2. Personal financial efficacy had no significant effect on FI (β = –0.19, SE = 0.11, p = 0.088, rejecting H5). Positive Personal Financial Well-being did not negatively contribute to FI (β = 0.09, SE = 0.17, p < 0.580) as hypothesised with H3a, but NPFW was a strong contributor to FI (β = 0.84, SE = 0.04, p < 0.001) supporting H3b. Satisfaction with remuneration had no significant effect on FI (β = 0.06, SE = 0.12, p = 0.611, rejecting H4). Similarly, FI positively contributes to burnout (β = 0.58, SE = 0.04, p < 0.001).

Table 5 estimates all the indirect effects in the model and the accompanying CIs.

The indirect relationships from PFE to burnout all included zero – rejecting potential mediation. Even though SWR showed no meaningful effect through PPFW (Estimate = 0.03; 95% CI[–0.14, 0.21]), there was a meaningful effect through NPFW (Estimate = –0.17; 95% CI[–0.27, –0.10]). Therefore, only the serial indirect effect from SWR, through both NPFW and FI to burnout, was found to be meaningful for interpretation, indicating that SWR has a negative effect on burnout through NPFW and FI in serial.

The study aimed to investigate employee financial well-being and burnout among employees in a South African engineering organisation. Various financial variables, collectively termed personal financial fitness dimensions and their relationships, were analysed using SEM methods and CFA. The analysis showed that all factor loadings were significant, most being 0.70 or above. Composite reliability estimates demonstrated internal consistency among all latent factors. Furthermore, the correlations among the variables were in the expected direction.

The data corroborated the first hypothesis (H1a). The analysis showed that there was a positive relationship between SWR and PPFW. This suggests that employees who feel adequately compensated or paid for their work and perceive their remuneration as satisfactory report better PPFW, as found in another South African study (Vosloo et al., 2014). They may feel more secure, able to meet their financial obligations, confident in their financial future and have less financial stress, as found by Kim and Garman (2004).

Hypothesis 1b posited a negative relationship between SWR and NPFW. The data also provided support for this hypothesis. The regression analysis revealed a significant negative path, indicating a negative relationship between SWR and NPFW. This suggests that individuals more satisfied with their remuneration tend to have lower levels of NPFW. This is consistent with the premise that remuneration significantly mitigates individuals’ financial stress and problems. Employees who feel that they are adequately paid are less likely to experience negative emotions and financial stress related to their financial situation.

It should be noted, however, that while SWR was found to have a significant relationship with both positive and negative aspects of PFW, the effect sizes, as reflected in the standardised beta coefficients, indicate that the effect is more substantial for PPFW compared to NPFW. This suggests that while SWR has a vital role in both PPFW and NPFW, it may substantially foster positive aspects of financial well-being more than mitigating negative ones. This nuance could be significant in remuneration strategies such as compensating employees, considering equity with internal and external remuneration benchmarks and individual equity where good performance is rewarded.

Regarding the hypothesised relationship between PFE and PFW, the results support Hypothesis 2a and Hypothesis 2b. For Hypothesis 2a, the data revealed that there was indeed a positive relationship between PFE and PPFW. The path indicated a substantial and statistically significant positive effect of PFE on PPFW. This finding aligns with Bandura’s (1977) self-efficacy theory, suggesting that the conviction to execute the behaviour required to produce outcomes successfully can significantly enhance the positive aspects of the outcome. Moreover, this result confirms the finding by Vosloo et al. (2014), showing a strong positive relationship between PFE and PFW. The data also support Hypothesis 2b. This indicates a statistically significant but less potent negative effect of PFE on NPFW. This suggests that as PFE increases, the negative components of PFW decrease. Given the stronger relationship between PFE and PPFW, organisations can enhance financial well-being by improving financial self-efficacy. This supports recent research showing that financial self-efficacy is positively related to financial well-being through positive financial behaviours (Dare et al., 2023). Organisations could implement interventions such as education, development, and coaching programmes to build financial confidence and management skills. These initiatives can help employees develop positive financial behaviours, leading to better financial decisions and improved financial well-being.

The data offered mixed support for Hypotheses 3a and 3b, which examined the relationships between PPFW, NPFW, and FI. Hypothesis 3a, which proposed a negative relationship between PPFW and FI, was not supported by the data. The regression coefficient was not statistically significant, indicating that the data did not provide evidence of a negative relationship between PPFW and FI. This unexpected result suggests that positive aspects of PFW do not necessarily reduce instances of FI, such as financial stress disrupting work or personal life.

Conversely, the data substantiated Hypothesis 3b, which posited a positive relationship between NPFW and FI. The path indicated that higher levels of NPFW (i.e., financial stress, financial difficulties) strongly contribute to FI. This finding supports previous research suggesting that financial strain can disrupt individuals’ work and personal lives (Kim & Garman, 2003). The path suggests that the impact of NPFW on FI is substantial and warrants consideration in interventions aiming to reduce FI. These findings shed light on the complex dynamics between PFW and FI and underscore the need to explore these relationships further. A qualitative approach is suggested, where a more detailed understanding of the problem can be attained instead of the more general understanding that this quantitative approach provides (Creswell & Plano Clark, 2018).

Hypothesis 4 posited a negative relationship between SWR and FI. The underlying assumption is that individuals more satisfied with their earnings would experience less FI because of a reduced likelihood of financial stress. However, the empirical data did not support this hypothesis. The results indicated that SWR had no significant effect on FI. This surprising result could be interpreted in several ways. Other factors beyond salary satisfaction, such as financial management practices, debt levels, or unexpected expenses, may have a confounding impact on FI, but they are not measured here. Alternatively, it could suggest that SWR is not a sufficiently nuanced measure to capture the complexities of an individual’s financial situation and its potential to cause interference in work or other areas of life. Further research could explore these interpretations and examine more granular aspects of an individual’s financial situation, such as financial management practices, levels of financial literacy, or psychological variables like attitudes towards money and spending.

Hypothesis 5, which proposed a negative relationship between PFE and FI, was not supported by the data. This path was also not statistically significant, indicating that PFE may not significantly reduce FI. The unexpected finding might be better understood considering the interplay between PFE and ILOC, another psychological construct reflecting the extent to which individuals believe they can control events affecting them. Both involve the belief in one’s ability to produce the desired outcomes (Bandura, 1977), with self-efficacy being context-specific (Van Diemen et al., 2020). In this case, the context is financial (such as PFE). Given this connection, PFE alone may not be enough to influence FI. Instead, it may interact with other factors, such as an individual’s ILOC. For example, a person with high PFE but low ILOC might still experience high FI because they do not believe they can control their financial outcomes despite their financial skills and knowledge. This could explain why our data did not find a significant effect of PFE on FI. Future research could benefit from including constructs such as ILOC to provide a better understanding of these relationships.

Hypothesis 6a suggested that FI mediates the relationship between PFFD and burnout. The results demonstrated a positive relationship between FI and burnout, which suggests that as FI increases, the levels of burnout also increase. This part of the hypothesis is supported, and this dynamic explains how financial stress disrupts work and could spill over into personal life.

However, the second part of the results indicated that all the 95% CIs of the indirect relationships from SWR and PFE (dimensions of Personal Financial Fitness) to burnout through FI included zero. Hypotheses 6b and 6c propose indirect relationships leading to burnout via a sequence (serial mediation) of PPFW and FI. In other words, when we consider the impact of SWR and PFE on burnout while controlling for FI, there is no meaningful indirect effect on burnout via FI. This finding rejects the proposed mediation of FI in the relationship between SWR and PFE and burnout in series. Hypotheses 6b and 6c are thus not supported by the data.

These results suggest that while FI is associated with burnout, it does not appear to be a significant mediating factor in the relationship between the aspects of Personal Financial Fitness known as PFE and burnout. Therefore, other mechanisms might be at play in the relationship between financial efficacy and burnout, which could be a fruitful direction for future research.

On the other hand, a significant indirect effect was found for SWR through NPFW, supporting Hypothesis 6d. The indirect path implies that being more satisfied with pay indirectly reduces burnout by improving financial well-being and reducing FI, although further research is recommended into SWR as indicated in the discussion in considering the surprising result of Hypothesis 4 (SWR had no significant direct effect on FI).

The present study found both a positive and a negative dimension of financial well-being (FWB), where NPFW includes financial challenges or problems (negative aspects) that employees may encounter (Afriforte, 2016). The finding, along with the definition, could mean that higher satisfaction with pay (SWR) makes it easier to address the financial challenges or problems and negative aspects, such as paying bills on time, which then reduces interference (FI) to performing duties at work, and this ultimately reduces burnout. This sequence is known as serial mediation, where one factor influences another, leading to an outcome. These findings highlight the importance of SWR in influencing an individual’s sense of well-being, addressing financial concerns, and experiencing work-related burnout.

In conclusion, this pattern of findings supports the need for companies to ensure fair and satisfactory remuneration, as this could benefit employees’ financial well-being, reduce FI, and help mitigate the risk of burnout.

The findings from this study, which investigated employee financial well-being and burnout in a South African engineering organisation, provide valuable insight for practitioners. The results have significant implications for human resources, management, and organisations, suggesting that financial factors substantially influence employee burnout and overall well-being.

The positive relationship between SWR and PPFW suggests that organisations should ensure competitive and equitable compensation packages. Remuneration strategies or interventions focussing on employees’ perception of fair compensation should be further investigated and explored quantitatively and qualitatively to attain objective and subjective equity. Satisfactory remuneration can contribute to employees’ feelings of financial security and confidence in their financial future, leading to better job satisfaction and performance. Thus, organisations should regularly review and adjust salaries and wages to remain competitive, fair, and aligned with the cost of living.

On the other hand, the negative relationship between SWR and NPFW implies that improving SWR can help reduce employee financial stress. However, the results also suggest that SWR has a more significant impact on fostering positive aspects of financial well-being than mitigating the negative.

In addition, the significant relationships between PFE and both aspects of PFW suggest that increasing PFE can significantly enhance PFW. Given these findings, organisations could consider incorporating financial self-efficacy into employee well-being programmes. This could include interventions to improve financial literacy, foster a culture of financial independence, and provide employees with resources and support to help them make informed financial decisions.

Despite the significant relationship between NPFW and FI, no significant relationship was found between PPFW and FI. This suggests that even if employees experience PPFW, they may still encounter FI, which can lead to burnout. To address this issue, organisations may need to consider additional strategies to mitigate the potential for FI, such as offering training on sound personal financial management practices, flexible work arrangements or providing support for employees dealing with financial emergencies.

The findings also revealed that SWR had no significant effect on FI, suggesting that other factors beyond salary satisfaction, such as financial management practices or unexpected expenses, may have a more powerful impact on FI. Therefore, organisations should consider providing comprehensive financial wellness programmes that include resources on budgeting, saving, and managing debt, as well as support for unexpected financial challenges. Furthermore, the non-significant relationship between PFE and FI suggests that financial self-efficacy alone may not be enough to influence FI. Future employee well-being programmes could, therefore, benefit from including other constructs, such as internal locus of control, to provide a more comprehensive understanding of employees’ financial situations and the factors that can lead to FI.

Lastly, the findings concerning the indirect relationships leading to burnout provide insights into the complex interplay between financial factors, PFW, FI, and burnout. The significant indirect effect found for SWR through NPFW suggests that ensuring fair and satisfactory remuneration could benefit employees’ PFW, reduce FI, and help mitigate the risk of burnout. This underscores the need for comprehensive compensation and benefits strategies that satisfy employees’ financial needs and contribute to their overall well-being.

While this study provides valuable insights into the complex dynamics between employee financial well-being and burnout in a South African engineering organisation, it also has some limitations that provide avenues for future research. Firstly, the study’s cross-sectional nature limits the ability to make causal inferences from the observed relationships. Future studies could adopt a longitudinal design to track these relationships over time, providing a more robust understanding of causality. Secondly, although this study involved a robust sample from a single engineering firm, the results may not be generalisable to other organisations or industries. It is recommended that future research includes participants from different sectors and socio-economic backgrounds to ensure a more diverse and representative sample. Thirdly, the present study relied on self-reported data, which might have introduced response bias. Future research could benefit from including objective measures such as assessing capability in skills or abilities such as financial management practices, looking at ways of assessing actual income data or verifying financial strain indicators to corroborate or provide additional context to the subjective data.

Regarding the constructs examined, the non-significant effect of PFE on FI might be attributed to the exclusion of other relevant psychological variables. We recommend the inclusion of variables such as ILOC in future research, as it might interact with PFE to influence FI. Finally, our data revealed a strong relationship between FI and burnout, yet FI was not a significant mediator between PFE and burnout. This suggests that other mediators might be at play, and we encourage future research to explore other potential mediational mechanisms in this relationship.

Overall, these findings underscore the importance of considering employees’ financial well-being in organisational settings and suggest a need for employers to explore interventions that promote financial well-being and mitigate the risk of burnout among employees. Given the potential role of remuneration satisfaction, strategies might include ensuring fair pay and transparent remuneration strategies as well as providing resources to mitigate NPFW, such as financial literacy programmes focussing on avoiding financial pitfalls, facilitating control over month-to-month finances, promoting emergency funds, employee support groups which may assist with sharing goals and ways to achieve financial freedom.