So you just had an amazing session of appraisal with your boss and you have been promised a significant raise in the month to come. You are thrilled for the first couple of months but after a while, you are back into the same rut. You re-evaluate your status and soon start comparing your salary to your colleague’s again. Why?
Contrary to popular belief, a recent study has shown that making more money may not make you happier.What we actually earn is just as important as how satisfied we are with our pay in determining our happiness.
A study, published in the Journal of Organizational Behavior, conducted by Devasheesh P. Bhave, a Concordia University professor, and Amit Kramer, a professor at the University of Illinois, showed that a pay hike only leads to a short-term satisfaction. Once workers achieve a sufficient level of pay, they shift their focus from what they can do with their salary to other focal points – such as how much their colleagues earn. Kramer says pay is relative. Once a worker makes enough to cover their basic needs, their perception shifts from what the amount allows them to physically purchase to social reference points like the work-life trade-off and where they stand in relation to their peers. “It becomes my pay compared to others,” he says. “Pay, as you might expect, is a relative thing. I think most people would agree that a certain level of pay that allows you to meet your needs, is critical,” Professor Amit Kramer, of the University of Illinois, said.” However, beyond that level, relative pay becomes an issue and with it, perception of pay or pay satisfaction,” Kramer said.
The study also looked into the relationship between pay levels, pay satisfaction and conflict at home, only to discover that employees who are happier with their pay report lower levels of work-family conflict. The study also found that while a pay rise can give short-lived happiness, working from home and flexible hours can make a big difference.
It is evident that chasing a fatter salary is no guarantee of happiness but if you think happiness only comes with a higher salary, you will be disappointed. Focusing on your own high salary will upset your poorer friends, and your richer friends will bring you down. Economist Dr Eugenio Proto, from the Centre for Competitive Advantage in the Global Economy (Cage) at the University of Warwick, looked at how personality traits also affect the way we feel about our income in terms of levels of life satisfaction. He said “We’re not happier because we can buy more things. We’re happier because we’ve achieved a target – that is, we’ve got a bigger car or a better house than the Joneses.” He concluded saying that “we see money more as a device to measure our successes or failures rather than as a means to achieve more comfort.”
Therefore, more cash will not make you happy but hey, there is no reason not to earn as much as you can, provided it meets your other aspirations of self-fulfillment and professional ambition.
Images : Glasberge.com, LSNED.com