Because you're worth it

The pay of the wealthy in our society has barely been out of the press in the last couple of years. Bankers salaries and bonuses have been attracting horror for some time, but in the last couple of weeks there's been some stories about the relative pay of those at the top and those in the middle. Our bosses, it seems, have been getting richer, with the top bankers now earning 74 times the average wage in their organisation, compare to 14 times in 1980.

Our relationship with money, and more specifically salaries, I think is quite a complex one. I've been having a read of some of the careers literature that touches on salaries to find out exactly what we feel about what we earn.

Evidence shows us that salary has a tiny and non-significant correlation with job satisfaction, so it doesn't make us any happier in our work. It has a slightly larger correlation with life satisfaction - so although is won't make your work life any better, you could argue that you might want a higher salary not to improve your working week, but to allow you to enjoy yourself a little bit more at the weekends. Jobs that pay higher salaries are more likely to enhance some of the work environment qualities that lead to higher job satisfaction (such as task variety) but are likely to decrease some others (such as relationships with colleagues) so overally salary doesn't even indicate greater job satisfation, let alone bring it by itself.

So money neither brings nor symbolises greater work satisfaction.

Nor, as I was astonished to find out, does it even make you happier with your salary. Pay has only a small correlation with pay satisfaction, which means that the big cheeses in your firm earning more than 100k a year are no more content with their salaries than the lowly junior clerks on less than 20k. This is really counter-intuitive, but when I think about my own career history, it begins to make more sense to me.

I think that I've always been sort of content-ish with what I earn, even though my salary has gone up and down quite considerably in my working life. In fact the time when I have been most pleased with my salary was when I was 15 and played the piano for a local ballet class, earning nearly twice what some of my friends did in their Saturday shop jobs, but still the lowest paid job I've ever had. And I think the key here is that our satisfaction with our salaries is relative. It's not about "what do I earn?" it's about "what do other people in my community earn, and how do I compare?". There is plenty of evidence that it's pay differences that make people troubled about their own wealth rather than money itself -big differences between rich and poor in a society make for unhappy countries. And I don't know if this strikes a chord with you, but I most often question my salary when I am spending time with my management consultant / lawyer friends, rather than my usual public sector crowd.

There was one study that was conducted at Harvard, which asked whether the students would prefer to earn a particular high salary or to earn a lower sum of money, but be guaranteed that they were earning more than all their classmates. Almost without exception, the students choose the relative wealth rather than the absolute wealth.

So what's it all about? Why are so many of us so concerned with our salaries? Why is it important for us to earn money, more money than we did before and more money that other people?

I guess it's all about a feeling of self-worth. Enshrined in all aspects of our culture is that we pay more for better things, and salaries are perceived as no exception to this. The more you are paid, the better you are. So we strive for better pay not because it makes us happier, or more fulfilled, or because it leads to more interesting jobs, or because of what we can do with it, but simply because it makes us feel valuable. And hey, we're worth it.