Psychological Reports, 2006,98,640-650.

O Psychological Reports 2006

DIMENSIONALITY O F T H E PAY SATISFACTION

QUESTIONNAIRE: A VALIDATION STUDY I N BELGIUM '

S. DE GIETER, R. DE COOMAN, R. PEPERMANS

Work, Organizational & Economic Psychology

Vrije Universiteit Brussel

R. CAERS, C. Du BOIS, M. JEGERS

Micro-Economics for the Profit and Non-profit Sectors
Vrije Universiteit Brussel

Summay.-This study examined the underlying dimensions of the Pay Satisfac-

tion Questionnaire to test whether the robust 4-factor structure (Pay Level, Benefits,
Raises, and Structure or Administration) often established in the United States can be
generalized to other countries and cultures as well. Data of 4 samples (for-profit em-
ployees, nonprofit nurses, cultural centre employees, and nonprofit teachers) were ana-
lysed with confirmatory factor analyses. The results for the first 3 samples yielded sup-
port for the original 4-factor structure of the Pay Satisfaction Questionnaire. In the
teachers' sample, the irrelevant Benefits items were excluded from the analysis, result-
ing in a 3-factor structure of pay satisfaction.

Pay is an important part of employees7motivation and behaviour (Spit-

zer, 1996); hence, pay satisfaction is a well established psychological con-
struct with an important influence on work related attitudes, e.g., job satis-
faction, organizational commitment, and on the decision to stay or leave the
organization (e.g., Lum, Kervin, Clark, Reid, & Sirola, 1998; McKenna,
1998; Thierry, 2002; Bordia & Blau, 2003). Following Lawler (1971), pay sat-
isfaction is perceived as a function of the discrepancy between the amount
of pay one expects and the perceived amount of pay one receives, influenced
by personal and environmental variables. This discrepancy model raised a
dual stream of reactions, either conceiving pay satisfaction as a one-dimen-
sional (e.g., Dyer & Theriault, 1976) or as a multidimensional construct
(e.g., Heneman & Schwab, 1985; Tremblay, Sire, & Balkin, 2000). The latter
position has quickly become widely accepted. During the last three decades,
many researchers concentrated on the pay satisfaction topic from diverse in-
terests: from defining the variable and developing adequate measures to iden-
tifying antecedents, influencing factors, and pay satisfaction outcomes (e.g.,
Lawler, 1971; Heneman & Schwab, 1985; Judge, 1993; Sturman & Short,

'Address correspondence to Sara De Gieter, Work, Organisational & Economic Psychology,

Vrije Universiteit Brussel, Pleinlaan 2, 1050 Brussel, Belgium or e-mail (Sara.De.Gieter@vub.ac.
be).
 PAY SATISFACTION QUESTIONNAIRE IN BELGIUM 64 1

2000; Fong & Schaffer, 2003; Carraher, Mulvey, Scarpello, & Ash, 2004;
Currall, Towler, Judge, & Kohn, 2005).
Pay Satisfaction Questionnaire
In 1985, Heneman and Schwab developed a questionnaire of 20 items
intended to measure five pay satisfaction dimensions. After an empirical test
within a sample of 355 white-collar employees from different organizations,
they reduced the test to 18 items measuring four dimensions: satisfaction
with Pay Level, Benefits, pay Raises, and pay Structure or Administration.
The results of a new large scale study with nurses and white-collar employ-
ees (Heneman & Schwab, 1985) confirmed this 4-factor structure and intro-
duced the Pay Satisfaction Questionnaire. Heneman and Schwab (1985)
urged the need for additional research on its validity and dimensionality.
Consequently, the Pay Satisfaction Questionnaire was examined in a number
of studies (e.g., Heneman, Greenberger, & Strasser, 1988; Scarpello, Huber,
& Vandenberg, 1988; Carraher , 1991; Judge, 1993) which generally confirm-
ed the multidimensionality. However, the dimensionality issue remained in
abeyance with some researchers suggesting 2, 3, or 4 factors when using ex-
ploratory factor analysis (e.g., Heneman, et al., 1988; Scarpello, et al., 1988;
Carraher, 1991)) whereas others identified 4 or 5 through confirmatory fac-
tor analysis (e.g., Mulvey, Miceli, & Near, 1991; Judge, 1993; Sturman &
Short, 2000). Furthermore, the wdlingness to accept the pay satisfaction di-
mensions as correlating differed between studies. Eventually, confirmatory
factor analysis with correlating factors seemed to be the most appropriate
method to evaluate the dimensionality of the Pay Satisfaction Questionnaire.
Applying this technique on two samples of longitudinal data, Judge and
Welbourne (1994) presented a strong support for the original 4-factor struc-
ture (Heneman & Schwab, 1985). Yet, other authors suggested that the dif-
ferences still found in the number of dimensions of pay satisfaction may re-
flect individualized characteristics, e.g., cognitive complexity, or contextual
factors, e.g., design of the organizational pay system, which influence the per-
ceived number of pay satisfaction dimensions (Carraher, 1991; Carraher &
Buckley, 1996; Carraher, et al., 2004).
Twenty years after its initial development, many researchers have exam-
ined the dimensionality of the Pay Satisfaction Questionnaire in various Sam-
ples, e.g., technicians, teachers, nurses, sales representatives, and managers.
The questionnaire has become a widely accepted, reliable and valid test for
measuring pay satisfaction in different organizations and sectors. Therefore,
Heneman and Judge (2000) called for a moratorium on validation studies
and asked to study antecedents and outcomes instead. However, one of the
major shortcomings of current Pay Satisfaction Questionnaire research is that
studies examining non-American samples are almost nonexistent: "The only
642 S. DE GIETER, ET AL.

exception to this recommended moratorium is research on the cross-cultural

dimensionality of pay satisfaction. . . it would be useful for future research
to evaluate whether the structure of pay satisfaction that appears to be so ro-
bust in the United States generalizes to other cultures" (Heneman & Judge,
2000, p. 84).
Lam (1998) anticipated this research need and examined the dimension-
ality of the Pay Satisfaction Questionnaire in Hong Kong, based on a sample
of 171 Chinese front-line workers. He concluded that a simple 2-factor struc-
ture (Pay Level and Benefits) seemed more appropriate in his culture. The
use of exploratory factor analyses with orthogonal rotation, however, makes
difficult comparison of his findings with the results of recent American stud-
ies.
Surprisingly, in Europe, to our knowledge, no validation studies of the
Pay Satisfaction Questionnaire have been undertaken yet. The present study
was undertaken to fill this void by investigating the underlying dimensions
of pay satisfaction as measured by the Pay Satisfaction Questionnaire in dif-
ferent samples of Belgian employees, which may even be regarded as indica-
tive for other western European countries.

Sample
This study examined the pay satisfaction of 788 employees working in
for-profit as well as nonprofit organizations in Belgium. All respondents were
employed full-time in the Dutch-speaking part of Belgium (Flanders). In this
study, 127 for-profit employees participated, working in different major for-
profit industries (e.g., ICT, finance, and transport). Also, paid employees
from the three largest nonprofit subsectors were questioned: private non-
profit nurses (n = 228)) nonprofit cultural centre employees (n = 188))and pri-
vate nonprofit secondary school teachers (n = 245). More sample characteris-
tics can be found in Table 1. The sex ratio of the nurses and teachers Sam-
ples is quite unbalanced but corresponds to the population ratio in these sec-
tors in Belgium.
The nonprofit subsectors studied here are all partly government-subsi-
dized. The wages of these particular nonprofit employees are prescribed by
the government, based on educational degree and seniority (Flemish Gov-
ernment, 2003'). This policy is also similar to procedures in other western
European countries. Benefits are not part of their everyday nonprofit reward

'Paritair comitt voor de socioculturele sector. Collectieve arbeidsovereenkomst van 30 januari

2003 tot vastlegging van de loonvoonvaarden in het sociaal-cultureel werk [Regulations for the
socio-cultural sector: collective work agreement of 30 January 2003 to establish wage regula-
tions]. http://www.wvc.vlaanderen.be (Accessed on 21/03/2004).
 PAY SATISFACTION QUESTIONNAIRE IN BELGIUM 643

TABLE 1
(N= 788)
SAMPLECOMPOSITION

For Profit Hospitals Cultural Centres Schools

( n= 127) ( n= 228) ( n= 188) ( n= 245)
Males, % 43.3 29.4 53.7 35.5
Females, % 48.8 70.2 46.3 64.5
Magv Yr. 32.0 37.7 38.1 38.1

system due to the nondistribution constraint (Mertens, Adam, Defourny,

Marke, Pacolet, & Van de Putte, 1999; HayGroup, 2001).
Measures
Pay satisfaction was measured using a Dutch version of the Pay Satis-
faction Questionnaire of Heneman and Schwab (1985), created through a
back-translation procedure. This questionnaire contained the 18 original
items assessing the four dimensions of pay satisfaction: satisfaction with the
Pay Level, Benefits, pay Raises, and the Structure or Administration of pay.
Responses were elicited on a 5-point Likert scale anchored by 1: very dissat-
isfied, and 5: very satisfied. The respondents were explicitly asked to answer
only those items they considered as applicable to their specific situation and
thus not to answer the >-point Likert scale if they found an item irrelevant
but simply mark this item, since some items were expected to be irrelevant
for specific nonprofit sectors.
Data Analysis
The missing data were analyzed first, to avoid jeopardizing the overall
construct validity of the scale. Then, separate confirmatory factor analyses
were performed for each of the four samples, using the Structural Equation
Modelling module of Statistica. This technique allows the hypothesized fac-
tor structure to 'drive the analysis rather than the analysis being data driven'
(Judge, 1993, p. 332). Since the purpose of this study was to examine the
factor structure of pay satisfaction in Belgium, the original hypothesized 4-
factor model (Pay Level, Benefits, Raises, and Structure or Administration)
was compared with different logically derived alternative factor-solutions,
based on the correlations between the original dimensions. This comprehen-
sive technique is also used in earlier studies on the dimensionality of the Pay
Satisfaction Questionnaire (e.g., Judge & Welbourne, 1994; Sturman &
Short, 2000). Appropriate fit indices were used to evaluate the factor mod-
els: the Goodness of Fit Index (GFI), the Bentler Comparative Fit Index
(CFI), and the Nonnormed Fit Index (NNFI), all of which should be .90 or
more; and the Root Mean Square Error of Approximation (RMSEA), which
should be smaller than .08 (Hair, Anderson, Tatham, & Black, 2005) to in-
dicate a good model fit with the data. RMSEA values above .10 are consid-
ered as unacceptable, indicating a bad model fit.
644 S. DE GIETER, ET AL.

Appropriateness of Items
To focus on the construct validity of the questionnaire, respondents
were asked to answer only those items which they found relevant for their
situation. For each item, the percentages of missing data are indicated in Ta-
ble 2. Concerning all four Benefits items, missing data percentages for the
nonprofit teachers varied from 50 to 69%, indicating that these items were
very often considered as irrelevant for the Belgian teaching situation. This
seemed reasonable, since Belgian teachers only receive limited benefits or
even no benefits at all. Therefore, the Benefits dimension was not included
in the further analyses of the nonprofit teachers' sample. Table 2 also indi-
cates high percentages of missing values for one item of the Raises dimen-
sion, i.e., "Influence my superior has on my pay," in all three nonprofit sam-
ples. In Belgium, the superiors of nonprofit teachers, nurses, and cultural
centre employees have little influence on the pay of their employees, since
this is regulated by the government and based on educational degree and se-
niority.

TABLE 2
PERCENTAGES
OF MISSING
DATA

Item Factor" For Hospitals Cultural Schools

Profit Centres
1. My take home pay PL 0.0 0.4 0.0 0.4
2. My benefit package BE 12.6 26.8 11.7 49.8
3. My most recent raise RA 13.4 15.4 14.9 11.0
4. Influence my superior has on my pay RA 26.0 45.2 28.7 75.1
5. My current salary PL 0.8 0.0 0.0 4.5
6. Amount the company pays toward my
benefits BE 15.7 32.9 14.4 67.8
7. The raises I have typically received in
the past RA 15.7 14.9 16.5 16.3
8. The company's pay structure S/A 4.7 7 .O 2.7 35.5
9. Information the company gives about
pay issues of concern to me S/A 3.1 4.8 4.8 28.6
10. My overall level of pay PL 0.0 0.0 0.0 2.9
11. The value of my benefits BE 1 4 28.1 12.2 60.0
12. Pay of other jobs in the company S/A 8.7 28.1 6.9 43.7
13. Consistency in the company's pay poli-
cies S/A 3.9 12.3 6.9 41.6
14. Size of my current salary PL 0.0 0.0 0.5 2.4
15. The number of benefits I receive BE 12.6 27.6 10.6 53.9
16. How my raises are determined RA 4.7 6.6 9.0 9.8
17. Differences in pay among jobs in the
company S/A 7.1 9.2 2.7 22.9
18. How the company administers pay S/A 1.6 3.9 2.7 20.0
"Factors: Pay Level (PL), Benefits (BE), Raises (RA), and Structure or Administration (S/A).
 PAY SATISFACTION QUESTIONNAIRE IN BELGIUM 645

Before continuing the analysis, the missing data were replaced by the
mean substitution within respondents across items technique (Roth, Switzer,
& Switzer, 1999): when a respondent answered 50% or more of the items of
one dimension, the other missing values for this dimension were replaced by
the mean of the completed item scores. Replacing missing data through lin-
ear trend estimations based on the total samples provided the same results
(results are provided by the authors upon request). But we found it inappro-
priate, given the validation purpose of this study, to estimate dimension
scores when none or less than 50% of the items were completed.
Factor Structure of Pay Satisfaction
For each of the four samples examined in this study, Table 3 presents
an overview of the mean scores per dimension, their standard deviations, the
correlations among these dimensions, and the internal consistency values. In
the teachers sample, only three dimensions were analysed, since the Benefits
dimension was considered irrelevant. In their seminal study, Heneman and
Schwab (1985) reported Cronbach alpha reliability estimates ranging from
.81 (Raises) to .95 (Pay Level and Benefits). In our study, Cronbach alpha
values ranged from .74 (Structure or Administration) to .97 (Pay Level).

TABLE 3
RELIABILITIES
AND CORRELATIONS
AMONGDIMENSIONS QUESTIONNAIRE
OF PAYSATISFACTION

Dimension n M SD Y

1 2 3 4
For Profit ( n= 127)
1. Pay Level 127 3.37 0.86 .94
2. Benefits 111 3.33 0.92 3 .95
3. Raises 122 2.85 0.80 .55 .23 .83
4. Structure or Administration 125 2.83 0.73 .48 .25 .60 .86
Schools ( n= 245)
1. Pay Level 244 3.38 0.95 .96
2. Benefits
3. Raises 225 2.89 0.75 .56 .87
4. Structure or Administration 181 3.07 0.57 .46 .56 .74
Hospitals ( n= 228)
1. Pay Level 228 3.12 0.94 .95
2. Benefits 169 2.43 0.92 .49 .93
3. Raises 205 2.75 0.73 .61 .58 .84
4. Structure or Administration 217 2.88 0.65 .49 .48 .66 .83
Cultural Centres ( n= 188)
1. Pay Level 188 3.07 0.92 .97
2. Benefits 166 2.89 1.02 .47 .96
3. Raises 167 2.85 0.79 .67 .54 .84
4. Structure or Administration 182 2.73 0.68 .55 .57 .70 .80
Note.-All correlations are significant at p < .01. Cronbach coefficients alpha are on the main
diagonal.
646 S. DE GIETER, ET AL.

These correlations between the dimensions are consistent with values report-
ed in other studies (e.g., Judge, 1993; Sturman & Short, 2000), meaning high
correlations among Pay Level, Raises, and Structure or Administration and
considerably lower intercorrelations with Benefits
The original 4-factor model (Pay Level, Benefits, Raises, and Structure
or Administration) was hypothesized to have the best fit to the data, expect-
ing all 18 items to load on their appropriate factor. For the for-profit sample
and the nonprofit nurses and cultural centre employees, the fit of the hypoth-
esized model was evaluated against six alternative models ranging from the
single-factor solution to several 3-factor models by combining dimensions
based on their intercorrelations. The results of these confirmatory factor
analyses are presented in Table 4. As expected, the 4-factor model showed
the best fit to the data (when compared to alternative hypothesized models),
in the for-profit sample (x,,,'= 240.08, p < .001, GFI = .80, NNFI = .91, CFI =
.92, and RMSEA = .09), nurses sample (x,,,'= 177.56, p < .01, GFI = 3 9 ,
NNFI = .97, CFI = .97, and RMSEA = .04), and the sample of cultural centre

TABLE 4
OF HYPOTHESIZED
FIT STATISTICS AND ALTERNATIVE
MODELS

GFI NNFI CFI RMSEA

For Profit ( n= 108)
Single factor
Orthogonal model
2-factor: combining PL, RA, and S/A"
3-factor: combining RA and S/A
3-factor: combining PL and RA
3-factor: combining PL and S/A
4-factor (hypothesized)
Hospitals ( n= 152)
Single factor
Orthogonal model
2-factor: combining PL, RA, and S/A"
3-factor: combining RA and S/A
3-factor: combining PL and RA
3-factor: combining PL and S/A
4-factor (hypothesized)
Cultural Centres ( n= 148)
Single factor
Orthogonal model
2-factor: combining PL, RA, and S/A"
3-factor: combining RA and S/A
3-factor: combining PL and RA
3-factor: combining PL and S/A
4-factor (hypothesized) 230.22 129 .86 .95 .95 .07
"Factors: Pay Level (PL), Benefits (BE), Raises (RA), and Structure or Administration (S/A).
 PAY SATISFACTION QUESTIONNAIRE I N BELGIUM 647

employees (x,,,'= 23 0.22, p < .OO1, GFI = .86, NNFI = .95, CFI = .95, and
RMSEA = .07).
In the nonprofit teachers sample, a 3-factor structure with Pay Level,
Raises, and Structure or Administration was hypothesized since the four Ben-
efits items were excluded from the confirmatory factor analyses. This model
was compared to five alternative models, again ranging from the single factor
structure to different 2-factor solutions. As can be seen in Table 5 , the 3-fac-
tor model showed the best fit to the data (x,:=
121.28, p < .001, GFI= .91,
NNFI = .96, CFI= .97, and RMSEA = .06).

TABLE 5
OF HYPOTHESIZED
FIT STATISTICS AND ALTERNATIVE
MODELS
FORSAMPLE
OF TEACHERS

Schools ( n= 86) x2 df GFI NNFI CFI RMSEA

Single factor 423.75 77 .65 .72 .76 .21
Orthogonal model 252.32 77 .83 .86 .88 .ll
2-factor: combining RA and S/A" 178.56 76 .85 .92 .93 .10
2-factor: combining P L and RA 335.00 76 .73 .79 .82 .17
2-factor: combining PL and S/A 239.73 76 .78 .87 .89 .14
3-factor (hypothesized) 121.28 74 .91 .96 .97 .06
"Factors: Pay Level (PL), Raises (RA), and Structure or Administration (S/A).

In Table 6 are the factor loadings of the Pay Satisfaction Questionnaire

items on their appropriate factor for each of the four samples. In the for-
profit and nurses samples, all factor loadings were above the recommended
minimum of .50 (Hair, et al., 2005). In the sample of cultural centre em-
ployees, one item of Structure or Administration had a rather low factor
loading of .46 ("Pay of other jobs in the company"). In the sample of teach-
ers, special attention is needed for Structure or Administration. Although the
internal consistency of this factor is acceptable (.74), four items had low fac-
tor loadings. This may be elicited by the term 'company' which is used in a l l
the Structure or Administration items. Several respondents commented that
they did not consider their school a company, in the narrow sense of the
word. This was also reflected in the higher percentages of respondents who
marked the items as being irrelevant for their situation. This inconsistent pat-
tern of factor loadings of Structure or Administration items has already been
acknowledged by other researchers as well (Heneman &Judge, 2000).

The present study examined the dimensionality of the Pay Satisfaction

Questionnaire within a non-American setting. Applying the confirmatory fac-
tor technique to four samples of Belgian employees yielded support for the
original 4-factor structure of pay satisfaction (Heneman & Schwab, 1985).
In three separate samples of for-profit employees, private nonprofit nurses
 TABLE 6
FACTOR
LOADINGS QUESTIONNAIRE
OF THE PAYSATISFACTION ITEMS

Item For Profit Hospitals Cultural Centres Schools

PL" BE RA S/A PL BE RA s/A PLBE
RA s/A PL RA S/A
My take home pay .78 .90 .95 .92
My current salary .84 .90 .98 .99
My overall level of pay .75 .91 .89 .95
Size of my current salary .87 .98 .93 .96
My benefit package .99 .97 .97
Amount the company pays toward my benefits .80 .86 .99
The value of my benefits .95 .83 .94
The number of benefits I receive .90 .93 .97
My most recent raise .80 .78 .68 .75
Influence my superior has on my pay .68 .52 .59 .69
The raises I have typically received in the past .80 .73 .74 .78
How my raises are determined .79 .66 .72 .55
The company's pay structure .69 .61 .73 .48
Information the company gives about pay issues
of concern to me .64 .5 1 .5 1 .36
Pay of other jobs in the company .52 .54 .46 .56
Consistency in the company's pay policies .83 .67 .66 .43
Differences in pay among jobs in the company .77 .52 .54 .53
How the company administers pay .62 .56 .65 .46
"Factors: Pay Level (PL), Benefits (BE), Raises (RA), and Structure or Administration (S/A).
 PAY SATISFACTION QUESTIONNAIRE I N BELGIUM 649

and nonprofit cultural centre employees, the 4-factor solution (Pay Level,
Benefits, Raises, and Structure or Administration) showed better fit with the
data than the alternative single, 2-, and 3-factor models of pay satisfaction.
These results are comparable with those of many American studies (e.g.,
Judge, 1993; Judge & Welbourne, 1994).
Although Sturman and Short (2000) already' indicated that researchers
should analyse the particular pay practices of their target sectors before ap-
plying all Pay Satisfaction Questionnaire dimensions and consequently ex-
clude some items when necessary, all 18 items were presented here, and the
respondents were asked not to answer the items they perceived as irrelevant
to themselves. This resulted in the deletion of the Benefit items in the Sam-
ple of private nonprofit teachers. A 3-factor model based on 14 items (Pay
Level, Raises, and Structure or Administration) showed the best fit with the
data above alternative single and 2-factor models.
In sum, this study provides support for the underlying 4-dimensional
structure of pay satisfaction as measured by the Pay Satisfaction Question-
naire outside the United States. Cultural differences between the United
States and Europe do not seem to influence this perceived dimensionality, at
least not when compared to various Belgian samples. Research in other Euro-
pean countries is, however, recommended, before this conclusion can be
generalized.
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Accepted April 28, 2006.