Does money bring happiness? It is probably one of the most debated questions by thinkers and philosophers throughout history. And the question remains current, more current than ever. At the labor market level, remuneration policy is one of the most important aspects. Salary is a central element in worker satisfaction and commitment. Some companies do not give it the necessary importance, while others think (wrongly) that with the salary they can compensate for other negative aspects of the company. In a job market like the current one, HAVING A GOOD UNDERSTANDING OF THE ROLE OF SALARY AND OTHER REMUNERATION ELEMENTS IS ESSENTIAL TO COMPETE SUCCESSFULLY IN A MARKET where it is increasingly difficult to find the right talent, attract them to the project, incorporate them and achieve their involvement and performance.
Scientific studies have found that, in general, increases in salary tend to lead to increases in happiness. For example, according to the North American consulting firm Gallup, up to $ 90,000 gross per year, salary increases usually lead to increases in happiness. Above $ 90,000, it is no longer true that higher salaries bring more happiness, and other more important aspects usually come into play. No matter how much a company pays, no organization achieves high performance if workers are bored, stressed, or even burned out.
Different studies clearly point to the idea that, at the salary level PERCEPTION IS MUCH MORE IMPORTANT THAN REALITY (as in many other aspects),. I am referring to how the worker perceives that he is being paid for his work. And in this sense, the results are surprising.
According to a study carried out by PayScale, of the workers who are paid above the market, 35% believe that they are paid below the market, 45% believe they are at the market level and only 21% really perceive that they are earning above the market. On the contrary, among those workers who earn at the market level, 64% think they earn below the market, 30% think they earn at the market level and only 6% think they earn above the market level. Therefore, it is not as easy as paying above the market. It is much better to pay at the market level and have effective discussions about compensation with each employee.
Remember the well-known phrase of James Goldsmith “If you pay peanuts, you get monkeys”. And the level of “engagement” is once again key in this regard. Professionals who are not engaged to their work will almost certainly change jobs in the face of any salary increase. While, in the case of engaged workers, it has been shown that they will need to receive salary increases of more than 20% to motivate a professional change.
Without a doubt, MANAGING REMUNERATION POLICY IS ONE OF THE GREAT CHALLENGES OF ANY LEADER. Paying workers well is almost essential, especially at lower wage levels. But apart from paying your employees well, you must explain your remuneration policy well. It is also often interesting to help and train them in financial planning and managing their income and savings.
And above all, remember that APART FROM THE SALARY THERE ARE MANY OTHER ELEMENTS THAT WILL ENHANCE (OR NOT) THE HAPPINESS OF THE WORKER IN THE COMPANY: the relationship with his boss, the purpose of the organization, professional growth, being able to use your strengths daily, … Therefore, “salary is very important, but it is not the only thing”.