Models of Pay Satisfaction: A Comparative Study

Abstract

Data from 133 industrial employees were used to assess the validity of five alternative models of pay satisfaction. The models differ systematically from each other in terms of their input data and the measuring process used to determine each model's estimate of pay satisfaction. The models were evaluated against the pay satisfaction sub-scale of the Job Descriptive Index. The social comparison-cost of living model yielded the best results followed by the three discrepancy models and finally by the objective pay distribution model. The findings suggest the three discrepancy models, although different conceptually and in the measurement process, are very similar in their ability to predict pay satisfaction. The objective pay distribution model, although exhibiting the lowest predictive power of all the models tested, may be able to provide a useful and readily available measure of pay satisfaction without resorting to employees' self-reporting.