Chapter 24: Modeling the Relationship Between Pay Level and Pay Satisfaction

The relationship between pay level and pay satisfaction was modeled in a field study with 456 employees of nursing departments in a large hospital. After controlling for person, job, and pay system characteristics, pay satisfaction variance was better explained by treating pay level as a power function rather than a linear function. This result was expected given the low wage rate relative to the market, the lack of a formal rewards system, and the high level of tenure in the workforce. Implications of this finding for theory, research, and practice were discussed.