Happiness of a pay rise is short-lived

A pay hike only leads to a short-term satisfaction before the rut sets in again, according to a new study.

Researchers have found that with a rise comes a re-evaluation of status and you soon begin to start comparing your levels of pay to your colleague’s again.

Once workers achieve a sufficient level of pay, they shift their focus from what their pay allows them to do to other focal points, such as how much their colleagues earn.

However, workers who are happy with their pay are less likely to have work and family conflicts, the ‘Daily Mail’ reported.

The study also found that while a pay rise can give short-lived happiness, working from home and flexible hours can make a big difference.

Researchers say how much people actually earn is just as important as how satisfied they are with their pay in determining their happiness.

“Pay, as you might expect, is a relative thing. I think most people would agree that a certain level of pay that allows you to meet your needs is critical,” Professor Amit Kramer, of the University of Illinois, said.

“However, beyond that level, relative pay becomes an issue and with it, perception of pay or pay satisfaction,” Kramer said.

“It becomes ‘my pay’ compared to others; ‘my pay’ compared to the effort I invest, ‘my pay’ compared to the things I give up and miss in life for the opportunity cost of working,” Kramer said.

“Organisations believe that actual pay is the No 1 incentive for employees.

“While this may be true for some employees, for others the social aspects of pay and the things they perceive to be sacrificing for pay are stronger or act as additional incentives and disincentives,” he said.

The study shows the effect of a pay rise on satisfaction only has a moderate relationship that does not last very long.

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