European Journal of Social Sciences – Volume 14, Number 3 (2010)

Determinants of Pay Satisfaction: A Study of the

Hotel Industry in Jordan
Padmakumar Ram
Associate Professor, School of Management, New York Institute of Technology
Sixth circle - Zahran Street, P.O. Box 840878, Amman 11184 Jordan
E-mail: pram01@nyit.edu

Gantasala V. Prabhakar
Assistant Professor, School of Management, New York Institute of Technology
Sixth circle - Zahran Street, P.O. Box 840878, Amman 11184 Jordan
E-mail: gpradhak@nyit.edu

Abstract
Most of the earlier research in the area of pay satisfaction was confined to US based
corporations. However in recent years, pay satisfaction has been increasingly studied in an
international context, prompting its relevance in a modern developing country like Jordan.
This study, guided by the general hypothesis that pay satisfaction is multi dimensional, was
measured using the Pay Satisfaction Questionnaire (Heneman & Schwab, 1985). A pilot
study, followed by a survey for pay satisfaction was done for 369 respondents from the
hotel industry. Results showed that all factor loadings for the four dimensions of pay
satisfaction are relatively strong, with the highest for Pay-raise, followed by Benefits,
Structure/Administration and then Pay-level. The authors found support for many of the
relations suggested by a theoretical model, and also point out the limitations of this study.
More sophisticated models could be developed and tested in future. Results show potential
for the conduct of similar studies with different samples in the other sectors of the
Jordanian economy, and indeed across other countries in the Middle East region as well.

Keywords: Pay Satisfaction, Pay-level, Raise, Benefits, Structure and Administration,

Multidimensional

Employee compensation is an important area of human resource management, not only because of it
huge cost implications, but also because of its perceived ability to influence individual and group
behavior in organizations. An individual’s desire to join an organization, to remain with an
organization, and to increase effort for the organization is a function of the design and implementation
of the organization’s compensation system (Bergmann, & Scarpello, 2002). Employees’ satisfaction
with their pay has been a major focus of study since the 1960’s.It is a function of the discrepancy
between employees’ perception of how much pay they should receive and how much pay they actually
receive. Most researchers agree that if these perceptions are equal, then an employee is said to
experience pay satisfaction. (Milkovich, & Newman, 2008).

Pay Satisfaction Questionnaire

Heneman & Schwab’s (1985) conceptualization of pay satisfaction as a multidimensional construct,
and their development of the Pay Satisfaction Questionnaire (PSQ) was a major breakthrough in the
study of pay satisfaction. They initially suggested that pay satisfaction exists along five relatively

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independent dimensions: pay level, pay administration, pay structure, pay raise, and benefits .But
subsequent confirmatory factor analytic results showed that the pay structure and pay administration
dimensions could not accurately be distinguished from each other. Exploratory factor analyses further
showed that a four factor solution was more appropriate. Hence, their original PSQ was modified to an
18-itemmeasure that considered four dimensions (pay level, benefits, pay raise, and pay
structure/administration).
The development of the PSQ, and subsequent research that followed, using the PSQ led to the
conclusion that pay satisfaction was a multidimensional construct (e.g., Heneman & Judge 2000;
Scarpello, Huber, &Vandenberg, 1988), with different factors having different antecedents and
different outcomes(e.g., Judge, 1993).

Past Research on Pay Satisfaction

A consistent finding in the literature is that there is a positive relationship between pay level and pay
satisfaction (Heneman, 1985). Therefore actual pay can be used by researchers to explain and predict
pay satisfaction. Satisfaction with pay is directly related to the pay level (Heneman & Judge 2000).
However in order to model the precise relationship between pay level and pay satisfaction, care must
be taken to consider the characteristics of the person and job (Lawler, 1971) and pay system
administration (Dyer & Theriault,1976) which may also influence pay satisfaction. The expected factor
structure of the PSQ (i.e., pay level, pay raise, pay administration, and benefits) has been generally
supported across various studies based in the U.S (e.g., DeConinck, Stilwell, & Brock, 1996;
Heneman, Greenberger, & Strasser, 1988; Judge, 1993;Judge & Welbourne, 1994).
Even though there has been relatively large literature on the dimensionality of pay satisfaction,
Heneman & Judge, (2000) noted that most of the studies on pay satisfaction dimensionality have been
conducted on American samples. Some studies have however examined pay satisfaction across
countries (Fong & Schaffer, 2003; Sweeney & McFarlin, 2004). There is an increasing need for
conducting pay level and satisfaction surveys across countries due to the globalized nature of the
economy.
Organizations often use different criteria to study how effective their compensation plans are.
These criteria include improved performance, compliance with laws and regulations, cost reduction,
and contribution to the strategic plans (Bergmann, & Scarpello, 2002; Gomez-Mejia, 1992). Employee
attitudes are also used to study the effectiveness of compensation plans because it is believed that they
can be used to predict important organizational outcomes. Pay satisfaction for instance has been shown
to be related to attendance, turnover, and union vote (Heneman, 1985)
Traditionally in pay satisfaction research, a linear relationship between pay level and pay
satisfaction is tested. A more strategic approach to determining pay level is needed, where it is no
longer sufficient to know that in general, pay level relates positively to pay satisfaction. On the other
hand, knowledge will be needed about the likely levels of satisfaction at varying pay levels existing, or
being considered in the organization. In this respect, management may need to know if pay satisfaction
increases at a constant rate, increasing rate, or decreasing rate with increasing salary rates.
The possibility of nonlinear relationships between pay level and pay satisfaction were reviewed
by Porter, Greenberger, and Heneman (1990). Based upon the principle of decreasing marginal utility
in economic theory, the relationship between pay level and pay satisfaction is best characterized as a
logarithmic function (Bernoulli, 1964).
According to psychological theory, there is a curvilinear relationship between pay level and pay
satisfaction (Adams,1965). Thus there is an initial positive relationship between pay level and pay
satisfaction, which levels off at some point, and then changes into a gradual decline of pay satisfaction
as pay level continues to increase. Heneman (1985) review, noted that previous studies have failed to
incorporate important predictor variables when modeling pay level and pay satisfaction. Previous

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research, reviewed by Porter et al. (1990), identified alternative nonlinear relationships, but did not
describe under which conditions each is likely to occur.

Four Factors Model

Pay Level Satisfaction
It is not surprising that salary or wages as measures of pay level consistently have been shown to
influence pay satisfaction (Berger & Schwab, 1980; Dreher, 1980; Dreher et al., 1988; Futrell, 1978;
Lawler, 1971; Miceli & Lane, 1991; Motowidlo, 1982; Ronan & Organt, 1973; Schwab & Wallace,
1974). Additionally, it is also hypothesized that the perceived amount of pay relative to others working
in similar jobs in other organizations (external equity) positively influences pay level satisfaction. This
has been emphasized by a number of authors (Dyer & Theriault, 1976; Gerhart & Milkovich,(1992);
Lawler, 1971;Miceli & Lane, 1991;Rice, Phillips, & McFarlin,1990).

Pay Raise Satisfaction

Several variables are hypothesized to influence pay raise satisfaction. First, the past raise history of the
individual is expected to positively influence pay raise satisfaction (Dyer & Theriault, 1976).
Individuals who have historically received higher raises in the past should be more satisfied with their
raises. Pay raise history may have an indirect effect on pay level satisfaction, since pay raises
contribute to pay level. Secondly, Dyer and Theriault (1976) have hypothesized that the perceived
accuracy of performance assessment, positively influences pay satisfaction. Since merit pay is based on
performance ratings, these attitudes should particularly influence pay raise satisfaction. Thirdly it is
hypothesized that the perceived contingency between performance and pay, influences pay raise
satisfaction. Dyer and Theriault (1976) hypothesized that perceived appropriateness of pay criteria
influences pay satisfaction. Hence it is expected that where merit pay exists, employees who perceive
pay increases based on any criteria other than performance, are also less likely to see the criteria as
appropriate. Therefore, it should result in lower satisfaction with pay raises. This hypothesis finds
support from Folgerand Konovsky (1989), who found that the perceived fairness of pay raise
procedures, explained variance in pay raise satisfaction beyond the effect due to pay raises. Finally,
employees who are eligible for pay increases over longer time intervals are receiving lower effective
annual increases. Therefore, the longer the interval over which employees are eligible for a merit raise,
the less satisfied they are expected to be with their raises.

Structure/Administration Satisfaction
Dyer and Theriault (1976) hypothesized that perceived understanding of pay criteria positively
influences pay satisfaction. Since understanding of pay criteria pertains to how pay policies are
communicated and administered, it is expected that more the individuals understand a pay system; the
higher will be their structure/administration satisfaction. In a merit pay system, managers are
particularly influential over the way pay is administered. As hypothesized by Miceli and Lane (1991),
perceived managerial influence over pay should affect satisfaction with the way the pay system is
structured/administered; those who believe that their manager has little influence over their pay in
general should be less satisfied with the administration of their pay. It also is hypothesized that
attitudes about the performance appraisal process influence structure/administration satisfaction. This
follows from Heneman (1985), who argued that attitudes about the performance appraisal process were
often related to pay system administration, and based on Dyer and Theriault's (1976) findings, such
attitudes should influence pay satisfaction.

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Benefit satisfaction
Benefit satisfaction is influenced by benefit coverage and employee cost (Dreher, Ash, & Bretz, 1988).
Since benefits are offered to all employees regardless of their position in the organization, when one is
concerned with employees in a single organization, it may be useful to investigate factors that differ
between individuals (Gerhart & Milkovich,(1992); Miceli & Lane, 1991). Hence, in situations where
employee benefit coverage is fixed, it is expected that individual differences that affect the relative use
or cost of benefits would be most predictive of benefit satisfaction.
It is specifically hypothesized that age negatively influences benefit satisfaction (Miceli &
Lane, 1991). The use of medical benefits, the most expensive of all benefits to employers and often
employees (Milkovich & Newman, 2008), increases with age (Taubman & Rosen, 1982). Since older
employees may be particularly sensitive to out of pocket benefit expenses (Barringer, Milkovich, &
Mitchell, 1990), they are expected to be less satisfied with their benefits. Second, salary grade level is
hypothesized to be negatively related to benefit satisfaction. Miceli and Lane (1991) argued that as
inputs into the benefit system (like co-payment, deductibles, etc.) increase relative to benefit outcomes,
satisfaction with benefits should decrease. Since in the organizations under study co-payments into the
health insurance fund are based on salary grade, yet coverage is constant across salary grades, it is
expected that the higher the salary grade an employee is in, the lower the level of benefit satisfaction
the employee will report.

Statement of the Problem

The Jordanian Hotel Industry is faced with challenges and opportunities that it must seize now to grow
and sustain on in the long run. One frequently quoted problem with the industry here is the lack of
equity in pay. Jordan, like many developing countries is endowed with human capital that is talented
and capable. It also experiences ‘brain drain,’ as competencies do not get due recognition in the form
of challenging work and pay. Pay in a developing country could be pivotal in motivating and retaining
human capital and ensuring the productive application of this irreplaceable resource. The researchers
have taken up the task of researching this hitherto unexplored and sensitive domain to contribute to the
local industry and add to the existing body of knowledge on pay and pay related consequences for
organizations.

Hypothesis and Research Model

H1: Pay-level positively influences Pay Satisfaction
H2: Benefits have a positive impact on Pay Satisfaction
H3: Pay Satisfaction is positively influenced by Pay-Raise
H4: Structure and Administration in the organization has a positive influence on Pay
Satisfaction.

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Figure 1: Research Model

Perceived Equity
Salary

Grade Level Pay-Level

Age
H1
Benefits
H2 Pay
Satisfaction
Pay-Raise H3
Experience
Entitlement H4
Structure/
Administration
Communication
Justice

Sample Size Determination

A pilot study was carried out on a random basis for 30 respondents and the characteristic taken in the
pilot study was, number of years of experience in the industry for respondents in the pilot study.

Pilot Study

Experience of more than 5 years Experience of less than 5 years Total

Respondents 18 12 30

P = Percentage of population who have more than 5 years of experience in hotel industry.
= Employees with more than 5 years of experience/Total pilot study respondents = 18/30 = 0.60
= 60%

Sample size determination (For Infinite Population)

n = {Z2 * (P) * (1-P )}/ C2
Z = 1.96 (For 95% confidence levels)
P = Percentage of population with a particular choice
C = Confidence levels expressed as a decimal
Taking 95% confidence levels and P = 0.6 (based on the pilot study)
n = {1.96*1.96*(0.6)*(1-0.6)}/0.05*0.05
= {3.8416*0.6*0.4}/0.0025
= 0.921984/0.0025
= 368.79
n = 369
Survey for pay satisfaction was done for 369 respondents and from four different five-star
hotels operating across Jordan. Pro-rata representation for Executive, Supervisory and Lower level
employees was given in the sample. The respondents were administered Heneman & Schwab’s (1985)

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PSQ questionnaires and the interview method was applied to draw feedback on each dimension.
Incomplete questionnaires were discarded and further respondents interviewed till the sample size was
reached for the empirical survey. The questionnaire was administered in person and the response rate
was as high as 95 percent. The data collection kicked off in October, 2009 and took until February,
2010 to be completed.

Employee Cadre No. of Respondents

Executive 75
Supervisory 115
Lower Level 179
Total 369

Statistical Tools employed: t-test for hypothesis testing, factor analysis using the varimax
rotation, descriptive statistics, correlation and covariance analysis.

Results and Discussion

Confirmatory factor analysis was carried out by the researchers to determine if the dimensions used
represent the hypothesis considered for the study. The factor analysis allows the investigation of the
degree to which specific items are loaded on their constructs (convergent validity). It also is useful in
distinguishing one construct from another (discriminant validity). Chi-square statistic was employed to
examine the hypothesis. Correlations between the dimensions considered for the study are moderately
high; they are far from unity (Table 1). The factor extraction method yielded one factor with all the
four dimensions contributing to Pay Satisfaction. For the Pay-Level factor, the loading on the
hypothesized factor was 0.422(Table 7). Pay-level was considered to be constituting of two
dimensions:
1. Perceived Equity
2. Salary
Perceived equity is hypothesized to influence pay-level satisfaction as employees compare pay
for the quantum of their inputs to the reward that they receive from the organization. The comparisons
that employees make with employees from other organizations are also instrumental in their perceived
satisfaction levels. External comparisons of salary component are ubiquitous and are hypothesized to
be influencing pay satisfaction.
For the factor ‘Benefits’, the average item loading was 0.860(Table 7). Benefits, the authors
opine are influenced by:
1. Grade level
2. Age
In a pilot study done for employees of the hotel industry, it was onerous that benefit packages
differed between grade levels for employees. The executive cadre of respondents had a distinct set of
benefits compared to the supervisory and lower level cadres. Age was also a determinant in perceived
satisfaction of benefits administered by organizations. Age determined the combination of benefits that
employees preferred to have, over the remaining ones in the benefits menu.
On the factor Pay-Raise, the average item loading was 0.908(Table 7). This factor of Pay-
satisfaction is influenced by the annual increment or entitlement that employees receive across the
board and also on their accumulated experience for the category of jobs. Employees with higher
experience expect a higher pay-raise every time for the knowledge, competencies and vast repertoire of
expertise that they bring with them. Pay satisfaction could be adversely affected if experienced
employees were treated on par with the freshmen when it came to pay-raise. Other factors such as pay-
raise history were not considered for this study, taking into account the difficulties involved with
collecting pertinent pay-raise history data from the participating organizations. The two dimensions
considered for this factor are:
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1. Entitlement
2. Experience
For the factor Structure/Administration, the average item loading was 0.688 (Table 7). The
factor Structure/Administration is dependent on the clarity in pay policies and is therefore a function of
communication. More the employees understand and appreciate the system in place, higher their pay
satisfaction levels. The role of the supervisor/manager can never be undermined in contributing to pay
satisfaction levels. The more the manager or supervisor could influence pay decisions, the higher
would be the employee’s performance and pay satisfaction. The two dimensions considered here for
this factor Structure/Administration are
1. Communication
2. Justice
It may also be noteworthy that justice is perceived to be both Procedural and Distributive, and
the role of the Supervisor/Manager in ensuring procedural and distributive justice is quintessential.
It is obvious from the results that all factor loadings for the four dimensions of pay satisfaction
are relatively strong, with the highest for Pay-raise at 0.908, followed by Benefits (0.860),
Structure/Administration (0.688) and then Pay-level (0.422).

Factor Analysis
Table 1: Correlation Matrix

Correlations
Variables
Level Benefits Raise Structure/ Administration
Level 1.000 0.390 0.364 0.253
Benefits 0.390 1.000 0.771 0.566
Raise 0.364 0.771 1.000 0.639
Structure/ Administration 0.253 0.566 0.639 1.000

Table 2: Means and Standard Deviation

Variables Level Benefits Raise Structure/ Administration

Mean -0.109 -0.012 -0.002 0.211
Standard Deviation 0.847 0.439 0.302 0.396
No. of valid Cases = 369
Kaiser-Myer-Olkin MSA statistic = 0.740

Table 3: Principal Component Analysis:

Variables Correlation Matrix Factor Analyzed

Level Benefits Raise Structure/ Administration
Level 1.000 0.390 0.364 0.253
Benefits 0.390 1.000 0.771 0.566
Raise 0.364 0.771 1.000 0.639
Structure/ Administration 0.253 0.566 0.639 1.000

Table 4: Roots (Eigen values) Extracted

1 2.542
2 0.795
3 0.442
4 0.221

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Table 5: Un-rotated Factor Loadings

Factors
Variables
Factor 1 Factor 2 Factor 3 Factor 4
Level 0.566 0.813 0.138 -0.009
Benefits 0.884 -0.073 -0.351 0.300
Raise 0.903 -0.153 -0.192 -0.354
Structure/ Administration 0.791 -0.326 0.513 0.075

Table 6: Percent of Trace in Each Root

1 Root = 2.542 Trace = 4.000 Percent = 63.561

2 Root = 0.795 Trace = 4.000 Percent = 19.880
3 Root = 0.442 Trace = 4.000 Percent = 11.044
4 Root = 0.221 Trace = 4.000 Percent = 5.515
Communality Estimates
1. Level 1.000
2. Benefits 1.000
3. Raise 1.000
4. Structures /Administration 1.000
Factor Analysis with Varimax Rotation
Kaiser-Myer-Olkin MSA statistic = 0.740
Original Matrix Trace = 1.86

Table 7: Varimax Rotated Loadings

Variables Factors
Factor 1
Level 0.422
Benefits 0.860
Raise 0.908
Structure/ Administration 0.688
Percent of variation in Rotated Factors
Factor 1: 55.381
Total Percent of variance in Factors: 55.381
Communalities as Percentages
1. 1 for Level 17.796
2. 2 for Benefits 74.033
3. 3 for Raise 82.407
4. 4 for VAR4 47.287
No. of iterations = 16.

Table 8: Covariance Matrix

Covariance
Variables
Level Benefits Raise Structure/ Administration
Level 0.717 0.145 0.093 0.085
Benefits 0.145 0.193 0.102 0.098
Raise 0.093 0.102 0.091 0.076
Structure/ Administration 0.085 0.098 0.076 0.157

Covariance is a measure of linear relation between random variables. It is an indicator of how

much two variables change together. Positive covariance indicates that higher than average values of
one variable tend to be paired with higher than average values of the other variable. The values from
Table 8 clearly indicate that the four factors considered here are intertwined. Each value in the
covariance matrix is positive and therefore is clear that these factors are linearly related.

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Table 9: T-test Values for prob. |corr.| > 0 test:

Variables Level Benefits Raise Structure/ Administration

Level 0.000 8.114 7.479 5.010
Benefits 8.114 0.000 23.167 13.145
Raise 7.479 23.167 0.000 15.895
Structure/ Administration 5.010 13.145 15.895 0.000

A one-sample location test of whether the mean of a normally distributed population has a
value specified in a null hypothesis. A two sample location test of the null hypothesis indicates that the
means of two normally distributed populations are equal. Once a t value is determined, a p-value can
be found using a table of values from Student's t-distribution. If the calculated p-value is below the
threshold value for a chosen statistical significance (usually the 0.10, the 0.05, or 0.01 level), then the
null hypothesis is rejected in favor of the alternative hypothesis. All calculated p-values from Table: 9
are higher than corresponding p-values at 0.05 levels and therefore establish the hypothesis considered
for this study.
The correlations among the four PSQ factors and for the sample of 369 are consistent with past
research cited in this paper. The pay-raise dimension is considerably higher on the factor loadings
(0.908) resonating with the respondents expectations with regard to pay-raise. Pay-raise across the
industry is nowhere comparable with other countries in the middle-east and therefore the most
important component of pay that employees across the industry expect to improve. Benefits vary with
the salary grade and are viewed important by respondents in their overall perception of pay
satisfaction. Respondents expected organizations to extend sponsored education, sabbaticals, paid
vacation, opportunities to work overseas, better accommodation benefits, relocation benefits,
recreational parties, membership to spas and clubs, chauffeur driven transportation for executives
among the many that could improve pay satisfaction and performance. Benefits had a high factor
loading with a score of 0.860. Respondents across the industry also opined that the role of their
supervisor/manager was very crucial in ensuring procedural justice. They wanted fair play in
determining entitlement, incentives, bonuses, and pay-raise. It was also strongly felt by the respondents
that the appraisal should be objective and should signal the consequence in the form of recognition and
reflect in pay-raise. The role of communication in conveying pay policies and changes thereof was
perceived to be very important to clarify expectations, standards, performance evaluations and
subsequent pay decisions. These opinions are clearly reflected in the factor loadings for
Structure/Administration factor with a factor score of 0.688. The correlation between the
manager/supervisor influence over pay with structure/administration with pay raise is strong with a
correlation of 0.639 (Table 1). The results of the present study corroborate the evidence in support of
the PSQ in the present study. The hypothesized model of pay satisfaction receives strong support from
the results. The variables exerted influence on pay satisfaction consistent with the four hypotheses.

Limitations and Directions for Future Research

Our study was basically limited to the hotel industry in Jordan. Only linear, bi-variate relations with
pay satisfaction were examined. We studied the relations between pay level satisfaction and its
correlates at the individual level, and not at the group or organizational level. Although some pay level
satisfaction research at the group or organizational level exists, more studies need to be conducted. It
was found that in some cases, use of a general pay satisfaction measure instead of a pay level
satisfaction measure, influenced conclusions regarding the strength of the relation between pay
satisfaction and its correlates. Measurement of specific compensation satisfaction dimensions would be
useful in measuring theoretical constructs (e.g., Scarpello et al., 1988; Sturman & Short, 2000). Even
though some researchers have focused on the impact of personality at work (Mount, Barrick, & Ryan,
2003), only a few primary studies of personality and pay satisfaction have been conducted (e.g., Shaw,
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Duffy, Jenkins, & Gupta, 1999).Our study does not include these and so, we suggest that researchers
include personality in their models of pay level satisfaction, and to test these relations.
In the absence of a proper appraisal system in the studied organizations, pay level may serve as
a proxy measure in the eyes of the employees, as far as their performance is concerned. Higher levels
of pay may also be seen as acknowledgement of good performance. This needs to be tested with further
research as we did not collect data on the psychological aspect of pay in our current study. Some of the
factors to be considered include the amount of pay relative to others, the type of reward system, and
characteristics of the workforce. For example, the type of function which best characterizes the
relationship between pay increases and pay satisfaction, may be different than the function which best
models the relationship between pay level and pay satisfaction. The same predictor variables may have
differential effects on various pay satisfaction facets (Heneman et.al. 1988; Judge, 1993. It is also
possible that the best fitting function may depend upon the facet of satisfaction under consideration.
The present study shows that if pay satisfaction is treated as one return to the organization, then
an increasing return rate in pay satisfaction could be expected for increasing levels of pay. The results
of this study have implications for compensation decision makers, with regard to the return to the
organization in the shape of better performance, attendance, less turnover, cost reduction, and
accomplishment of the strategic plan etc. from various pay levels.
Though there are some limitations, the present study contributes to the existing state of
knowledge of pay satisfaction in several ways. The results suggest that the PSQ is a valid measure of
the dimensions of pay satisfaction. By using the PSQ, employees would be treated as the
organization’s internal customers.
Overall the specific items contained in the PSQ contribute to their hypothesized dimensions,
and these dimensions are conceptually and empirically distinct, even though further research is needed
in this respect. Our results also show that all dimensions significantly contributed to overall
satisfaction, but pay raise and benefits contributed more variance than the other dimensions. Future
research, as to which are the most important dimensions of pay satisfaction also is needed.
Beyond the areas identified above, there are several other areas for future research.
It was hypothesized by Ash and Bretz (1988) that different equity perspectives viz. individual,
internal, or external, would involve different comparison others, and thus evaluation of the dimensions
of pay satisfaction may involve different equity comparisons. Such a perspective could be useful in
further understanding the psychological processes underlying employee judgments of pay satisfaction.
Another area for future research is the cognitive processes underlying judgments of pay
satisfaction. It would be interesting to know if individuals use compensatory models when arriving at a
judgment of overall pay satisfaction based on the dimensions of pay satisfaction, and if so how? How
different dimensions of pay satisfaction affect various employee behaviors is also an important area for
future research.

Conclusions
The present study provided evidence that pay satisfaction is multi-dimensional, as hypothesized by
Heneman and Schwab (1985). The results suggest that the various dimensions of pay satisfaction are
distinct, and are differentially influenced by factors that are consistent with our expectations. The
results provide clear implications for organizations not only in Jordan, but also to other countries in
this part of the world, interested in pay satisfaction, and suggest areas where further research might be
needed.

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