More Pay = More Satisfaction?

We all want a job that pays well, right? How many of us think things like "if I could only make "X" amount more, I would be happy"? Tempting to think such things isn't it? These questions, of course, address the old debate of whether pay leads to satisfaction. We've all heard anecdotes about people who make lots of money and are miserable yet many of us can't help but think that more money would give us more job satisfactaion as well as improve our lives overall.

In the Journal of Vocational Behavior, Author T.A. Judge, et al, recently put this issue to the test to find out if employees find higher paying jobs more satisfying. While their results suggest that within organizations, higher pay is associated with higher job satisfaction, the relationship was not very strong. Not surprisingly, the results also suggest that pay level is more strongly related to employees' satisfaction with pay specifically than with the job overall. Moreover, the fairly weak relationships between pay level and satisfaction were consistent across several countries (U.S., Great Britain, India, Australia, Taiwan).

This study suggests that while increased pay is somewhat associated with increased satisfaction, it's not a strong enough correlation to say anything definitively. If employees truly want satisfying work, then searching for the best paying job is probably not the way to go.

The authors note that attractive characteristics of the leaders and the actual job are likely better predictors of job satisfaction than pay level. People tend to leave positions more because of issues with their direct boss rather than any other issue.

While these results also suggest that increasing pay alone is probably not the best way to improve employees' attitudes, they advise that pay does have motivational power. Being a pay leader in the industry is unlikely to boost organization-wide satisfaction, because employees tend to compare themselves to others, but it will attract highly qualified candidates who value their own skills and experience and look for a company that fairly compensates and values employees financially as well as otherwise.



Publication: Journal of Vocational Behavior (OCT 2010)

Article: The relationship between pay and job satisfaction: A meta-analysis of the literature

Authors: T.A. Judge, R.F. Piccolo, N.P. Podsakoff, J.C. Shaw, and B.L. Rich