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A study was conducted with 104 hospital employees to assess the relationship between pay-for-performance perceptions and pay satisfaction. Unlike previous research examining this relationship, a multi-item measure of pay-for-performance perceptions and a multidimensional measure of pay satisfaction were used. As hypothesized, the results indicated a positive relationship between pay-for-performance perceptions and payraise satisfaction, pay-level satisfaction, and overall pay satisfaction even after the effects of salary level, salary increases, performance ratings, job tenure, job satisfaction, and promotions were controlled. The importance of gathering perceptual data on characteristics of the pay system believed to have differential relationships with the subdimensions of pay satisfaction are discussed.

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