Topic: Employee Satisfaction, Job Attitudes
Publication: Journal of Vocational Behavior (OCT 2010)
Article: The relationship between pay and job satisfaction: A meta-analysis of the literature
Authors: T.A. Judge, R.F. Piccolo, N.P. Podsakoff, J.C. Shaw, and B.L. Rich
Reviewed By: Benjamin Granger
We all want a job that pays well, right? How many of us think things like “if I could only make that much more, I would be happy”? Tempting to think such things isn’t it? These questions, of course, address the old debate of whether pay leads to satisfaction. We’ve all heard anecdotes about people who make lots of money and are miserable yet many of us can’t help but think that more money would make us more satisfied.
In an extensive meta-analysis, Judge et al. recently put this issue to the test to find out if employees find higher paying jobs more satisfying. While their results suggest that within organizations, higher pay is associated with higher job satisfaction, the relationship was not very strong. Not surprisingly, the results also suggest that pay level is more strongly related to employees’ satisfaction with pay specifically than with the job overall. Moreover, the fairly weak relationships between pay level and satisfaction were consistent across several countries (U.S., Great Britain, India, Australia, Taiwan).
Judge et al.’s study suggests that while increased pay is associated with increased satisfaction with one’s pay and job, these relationships are not as strong as we might assume. If employees truly want satisfying work, then searching for the best paying job is probably not the way to go.
The authors note that attractive characteristics of the leaders and the actual job are likely better predictors of job satisfaction than pay level.
While these results also suggest that increasing pay alone is probably not the best way to improve employees’ attitudes, Judge et al. warn that this does not mean that pay does not have any motivational power. Nevertheless, being a pay leader in the industry is unlikely to boost organization-wide satisfaction as employees are well known to compare themselves to others and there is evidence that pay is satisfying only to the extent that it is higher than comparable others (e.g., coworkers).
Judge, T.A., Piccolo, R.F., Podsakoff, N.P., Shaw, J.C., & Rich, B.L. (2010). The relationship between pay and job satisfaction: A meta-analysis of the literature. Journal of Vocational Behavior, 77, 157-167.