Lump-sum bonus satisfaction: Testing the construct validity of a new pay satisfaction dimension

There are both practical and theoretical reasons to measure lump-sum bonus satisfaction. The practical need for such a measure stems from its increase d use as a component in modern compensation practices. Based on the means o f administering and allocating lump-sum bonuses, a theoretical case can be built suggesting that lump-sum bonus satisfaction constitutes a separate co mponent of pay satisfaction fitting into the Pay Satisfaction Questionaire' s (PSQ) theoretical framework. We develop 4 questions that complement the P SQ, and use a series of techniques to test the convergent and discriminant validity of the measure. Empirical evidence shows that bonus-related items are more related to the lump-sum bonus satisfaction measure than other PSQ dimensions. We also demonstrate that the dimension of lump-sum bonus satisf action has a substantive relationship with attitudinal variables beyond tha t provided by pay level variables and the PSQ. The development of this meas ure should foster greater accuracy when assessing pay satisfaction levels a nd the effects of lump-sum bonus pay policies.