The output beams of a dispersion-compensated polarization Sagnac interferometer include not only ±1st-order beams but also beams of 0th and other orders. Consequently, the contrast of the interference fringes generated in a focal plane array (FPA) is reduced, which means the quality of the image and reconstructed polarization images is poor. In this study, multistage diffraction is investigated to determine the effect of non-ideal beams on imaging quality. After determining the beams that can cast onto the FPA, the intensity on the FPA is studied with consideration of multistage diffraction. Results show that the non-ideal beams can lead to a serious reduction in imaging quality. The experiment and simulation results indicate that the beams can reduce the ratio of the fringe amplitude to the background signal to 1/8 from the ideal 1/2. Therefore, methods that can attenuate or eliminate other diffracted beams should be adopted. This conclusion is applicable to other optical structures containing gratings, such as a spatial heterodyne spectrometer.