Pay Satisfaction and Organizational Outcomes

Using multi level and multi method data, we investigated the relationship between pay satisfaction and outcomes at the organizational level of analysis. Individual‐level survey data on pay satisfaction (including satisfaction with pay level, satisfaction with pay structure, satisfaction with pay raises, and benefits) were collected from 6,394 public school teachers. Organizational‐level outcome data, both survey and archival, were collected from the 117 public school districts employing these teachers. With respect to its influence on organizational outcomes, pay satisfaction was positively related to school district‐level academic performance and negatively related to average teacher intention to quit. We also explored the relationship between district‐level union satisfaction and pay satisfaction, which was found to be positive. We discuss implications of our findings for for‐profit companies that are knowledge based and human capital intensive (e.g., the service sector) and address possible future directions for research on pay satisfaction.