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Employee Satisfaction Dependent On More Than Relative Pay

Date:
August 28, 2008
Source:
Wiley-Blackwell
Summary:
Employee well-being is dependent upon the rank of an individual's wage within a comparison group, as opposed to the individual's absolute pay.
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A new study in the journal Industrial Relations reveals that employee well-being is dependent upon the rank of an individual’s wage within a comparison group, as opposed to the individual’s absolute pay.

Gordon D.A. Brown, Jonathan Gardner, Andrew J. Oswald, and Jing Qian asked undergraduates to rate how satisfied they would be with wages they might be offered for their first job after college. Subjects expressed feelings about each potential wage in the context of a set of other wages. Researchers also analyzed data from 16,000 employees who reported on workplace satisfaction.

Employees did not care solely about their absolute level of pay. Workers were more concerned with their income relative to the salary levels around them in their workplace. Individuals were not just influenced by relative income but by the rank-ordered position of his or her wage within a comparison set.

“Our study shows how ordinal rank has a statistically significant effect upon well-being” the authors conclude. “Results show that human well-being depends in a particular way upon comparisons with others.”


Story Source:

The above story is based on materials provided by Wiley-Blackwell. Note: Materials may be edited for content and length.


Journal Reference:

  1. Brown et al. Does Wage Rank Affect Employees’ Well-being? Industrial Relations, 2008; 47 (3): 355 DOI: 10.1111/j.1468-232X.2008.00525.x

Cite This Page:

Wiley-Blackwell. "Employee Satisfaction Dependent On More Than Relative Pay." ScienceDaily. ScienceDaily, 28 August 2008. <www.sciencedaily.com/releases/2008/08/080828084100.htm>.
Wiley-Blackwell. (2008, August 28). Employee Satisfaction Dependent On More Than Relative Pay. ScienceDaily. Retrieved May 25, 2015 from www.sciencedaily.com/releases/2008/08/080828084100.htm
Wiley-Blackwell. "Employee Satisfaction Dependent On More Than Relative Pay." ScienceDaily. www.sciencedaily.com/releases/2008/08/080828084100.htm (accessed May 25, 2015).

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