What do you think; can you buy your people happiness with money? I would think that there are people who say ‘yes’ and there are people, who say ‘no’.
Well, let’s have a deeper look into that. Money is important and we definitely need money to create great employee experience. For instance, we know that good access to coffee and tea is vital to ensure employees stay happy. We need money to offer different perks, to train and develop our peoples, to promote and support collaboration and communication, etc.
Money is important to people. People need money to stay alive: to buy food, to pay for living, etc. Exactly like Abraham Maslow Hierarchy of Needs Theory from 1943 is stating. According to the theory each individual has a hierarchy of five needs: physiological needs, safety needs, social needs, esteem needs, and self-actualization need. Physiological needs are the basic needs that every human being has, like a need for air, water, food, clothing, and shelter. The urgency of needs varies, but in order to get to the ‘next level,’ the basic needs must be fulfilled. Which would mean that in order to move toward happiness you need the money to cover those needs that help a person to stay alive.
One thing is to have your basic needs covered, but is there a correlation between salary and people happiness? According to this Forbes article, there is. CareerBliss analyzed more than 70,000 job reviews written by employees between 2012 and 2013 and found that money can buy happiness—at least in the workplace. It turned out that the overall happiness ranking for people making between $30,000 and $40,000* a year (the lowest salary bracket analyzed for this study) was 3.43 out of 5, which made this the least happy salary bracket. It rose to 4.00 for those making between $200,000 and $225,000 (the highest salary bracket analyzed for this study) making these workers the happiest of all. But this is not the only study that finds a link between salary and happiness. The same finding was discovered by the Glassdoor study. They used a sample of 221,000 Glassdoor users who contributed both a salary report and an employer review for the same company since 2014. One thing that they discovered was: higher pay is associated with higher employee satisfaction. Only 10 percent of users making more than $120,000 per year left a one out of a five-star review, compared to 15 percent of users making less than $30,000 per year. Conversely, 51 percent of users making more than $120,000 per year left either four or five-star reviews, compared to 40 percent of users making less than $30,000 per year. In other words, it seems higher salaries mean higher satisfaction. (In case you want to learn more about the findings of this Glassdoor study then check it out here).
To be honest, this is not at all where I wanted to end up when I started to study the link between money and happiness. But here I am now and there is now turn back. The people have spoken. They say and see that money matters, and the more they have it the happier they would be. But… there is a but. Yes, money is important, but only up to some level and after that it doesn’t play so great role anymore. A 2010 study from Princeton University researchers showed that having a higher income increases happiness but only up to about $75,000* income per year. Beyond that, higher pay doesn’t influence happiness much, and other factors take over.
It brings me back to Maslow Hierarchy of Needs theory – you need money to cover your basic needs. Pay is the hygiene factor, in case people constantly need to worry about the money (how to pay for food, shelter, children’s clothes, etc.) then they can’t be happy neither at home or at work. But in case your income doesn’t make you worry about your basic needs anymore then you can focus on other factors that help to create employee experience in an organization.
So yes, money is important. But as it turns out, it is not among the main drivers of workplace happiness, at least according to another Glassdoor study of more than 615,000 of its users (who contributed both a salary report and company review since 2014). The most important workplace priorities for all workers in this study, regardless of income level, were: culture and values. Followed by the quality of senior leadership, a positive business outlook of the organization, work-life balance, and finally, the quality of compensation and benefits.
Let me know, what do you think, can money buy a workplace happiness?
* average salary in USA in Q4 in 2017 was $44,564 per year for a 40-hour workweek according to the Bureau of Labour Statistics.
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