Money vs. Happiness

Compensation is always a hot topic when you are in HR. Whether it is salaries or pay for performance strategies, compensation continues to be a major motivator for many employees. Kristina Cowan over at Payscale’s The Salary Report blog looked at this topic in a recent post titled What Is an Intrinsic Satisfaction on the Job–Big Money, or Big Happiness?. This post looks at what actually motivates people as they choose careers.

One of the key takeaways is some intelligence Cowan shares from Harvard social psychologist Daniel Gilbert:

1. Money makes us happier, but only to a point

2. Relationships trump money

For HR practitioners, I don’t think this is anything earth shattering, but definitely something to consider as HR programs are planned and managed. Especially the relationships part as Gilbert discusses how the “best predictor of happiness is the relationships people have with others and the amount of time they spend with family and friends.”

This is important in two key ways. First, there’s a need for organizations to create strong relationships between individuals at all levels. Encouraging opportunities for peer to peer mentoring and feedback create lasting relationships and strong connections that can make the difference for an individual employee. Ensuring employees have strong communication with managers, a clear career path and goals, and feel like they are contributing to the organization’s overall success can all make a critical difference.

Another key way this is important for HR is when it comes to fostering a climate where work/life balance is promoted and truly valued. This may be through offering employees flexible work arrangements or creating opportunities for individuals to volunteer on company time. The more time employees spend with family and friends, the happier they will be. A culture where they are working around the clock will only lead to employee burnout and turnover.

If you want to explore more, I’d encourage you to pick up a copy of Daniel Gilbert’s book Stumbling on Happiness and keep checking out The Salary Report for more insightful posts.