Scale Analysis and Objective

The Pay Satisfaction Questionnaire (PSQ-20) was developed in 1985 by Herbert G. Heneman and Donald P. Schwab. It was based on the assumption that an employee’s satisfaction with their compensation is multidimensional. Therefore, the purpose of the questionnaire is to assess five dimensions (pay level, benefits, raises, structure, and administration), which appear to form key pillars in compensation satisfaction.

Question Calibration and Statistical Analysis

The structure of the questionnaire consists of 20 items (four for each of the five dimensions), rated on a 5-point Likert-type scale. Responses for each dimension range from 1 (Very Dissatisfied) to 5 (Very Satisfied). Thus, the higher the overall score, the more satisfied the employee is with their financial compensation.

Validity and Reliability

Following numerous studies, it was demonstrated that the PSQ-20 exhibits high levels of reliability and validity. This is evidenced by the Cronbach’s alpha coefficient: α = 0.94 for pay level, α = 0.93 for benefits, α = 0.84 for raises, and α = 0.85 for structure and administration.

References

Heneman III, H. G., & Schwab, D. P. (1985). Pay satisfaction: Its multidimensional nature and measurement. International Journal of Psychology, 20(1), 129–141.