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Pay satisfaction: its multidimensional nature and measurement.

H G Heneman1, D P Schwab

  • 1University of Wisconsin - Madison, USA.

International Journal of Psychology : Journal International De Psychologie
|April 1, 2015
PubMed
Summary

This study found pay satisfaction is multidimensional, developing the Pay Satisfaction Questionnaire (PSQ) to measure its various aspects. Results support a four-dimensional model, offering improved insights into employee compensation perceptions.

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Area of Science:

  • Organizational Psychology
  • Human Resource Management
  • Industrial-Organizational Psychology

Background:

  • Employee compensation is a critical factor influencing job satisfaction and organizational outcomes.
  • Existing measures of pay satisfaction may not fully capture its complex nature.
  • Understanding the dimensions of pay satisfaction is crucial for effective HR practices.

Purpose of the Study:

  • To test the hypothesis that pay satisfaction is a multidimensional construct.
  • To develop and validate a comprehensive instrument, the Pay Satisfaction Questionnaire (PSQ), for measuring pay satisfaction.
  • To compare the dimensionality of the PSQ with existing pay satisfaction scales.

Main Methods:

  • Development of the Pay Satisfaction Questionnaire (PSQ) with an initial five-dimensional structure.
  • Administration of the PSQ to two diverse employee samples.
  • Factor analysis to determine the optimal dimensional structure of the PSQ.
  • Reliability analyses (internal consistency) for the developed scales.
  • Comparative analysis with established pay satisfaction measures (Job Descriptive Index, Minnesota Satisfaction Questionnaire).

Main Results:

  • Empirical support for the multidimensional nature of pay satisfaction.
  • A four-dimensional structure (level, benefits, raises, structure/administration) provided a superior fit to the data compared to a five-dimensional model.
  • The four derived PSQ scales demonstrated high internal consistency reliability.
  • Established pay satisfaction scales (JDI, MSQ) were found to primarily measure satisfaction with pay level.

Conclusions:

  • Pay satisfaction is best understood as a multidimensional construct, encompassing distinct facets of compensation.
  • The developed four-dimensional PSQ offers a more nuanced and accurate measure of pay satisfaction.
  • Findings have significant implications for both the substantive understanding and measurement of pay satisfaction in organizational research and practice.