PAY COMPARISONS AND PAY SATISFACTION AMONG PUBLIC-SECTOR EMPLOYEES

When deciding if they are fairly paid, people look at both the absolute amount of pay and the relative amount of pay. The relative amount of pay is determined by comparing their own pay with that of others. This study investigated the relative component of pay satisfaction for 143 municipal employees. Town employees were asked to rate the importance of 17 different pay comparisons which represented 4 broad categories of referents: external, personal, economic, and ego comparisons. The effects of each type of referent on feelings of pay satisfaction then were assessed. Results suggest that external comparisons may lower pay satisfaction while personal comparisons tend to increase pay satisfaction.