Predicting the Salary Satisfaction of Exempt Employees

This study examined the degree to which salary satisfaction can be predicted using company‐maintained information commonly available to salary administrators. Predictors included years of continuous service, educational level, annual performance rating, an estimate of career potential, monthly salary, a measure of the most recent salary increase, and employee gender. A variety of hypotheses derived from Lawler's (1971) model of pay satisfaction also were tested, focusing on the relative contribution of perceived performance, perceived job demands, certain non‐monetary outcomes, and external and internal pay equity. The research utilized a sample of managerial, professional, and technical employees from a large national oil company. The results suggest that without the inclusion of a variety of employee perceptions, only a small proportion of pay satisfaction can be accounted for, with salary and sex representing the primary objective predictors. Perceived performance, perceptions regarding supervision, advancement opportunity, and the company's benefit package, and both external and internal pay equity, were related to pay satisfaction in the direction predicted by Lawler's model. The implications of not being able to estimate pay system perceptions using company‐maintained sources of information are discussed along with the results supporting certain key components of Lawler's model of pay satisfaction.