Thursday, 1 October 2009

Employee Happiness - throw cash at them right?

Recently I've been reading some of the work by psychologist Amos Tversky. Tversky was a cognitive and mathematical psychologist and pioneer in the study of systematic human cognitive bias and how we as humans handle risk. The following scenario is based on research originally completed by him.

Imagine you were offered two jobs. They are the same in terms of working hours, duties location and career prospects - in fact Job A is exactly identical to Job B in every way - except one, the difference between your salary and that of your colleagues. In Job A your annual pay will be £50,000 and your colleagues will earn £30,000. In Job B your annual pay will be £60,000 and your fellow employees will be on £80,000.

Which would you prefer?

Then, which would make you happiest?

Surprisingly when Tversky posed these two questions he got different answers. We'd all prefer to earn more money, but when happiness was introduced respondents felt that this had more to do with their perceived value to the organisation - even to the extent of being paid less at a perceived higher value. This is an interesting problem for those people currently in the job marketplace or in salary negotiation with a prospective employer.

What did you answer to each of the questions? Did you change your mind for happiness?


Dan Abel said...

weird, i'd choose the latter, and not for the higher initial salary.

1) smaller fish in bigger pool = chance to grow
2) time to grow into roll before the big time
3) salary suggests very good people to work with (if salaries can suggest greatness)

Stacy Curl said...

Option 1 looks horrible, it looks like I'd be surrounded with junior people, where is the opportunity for growth as a coder in that ? The only potential I can see from option 1 is that of leading a team but even then I'd rather lead people who are close to my equal (in terms of knowledge, ability, etc.).

What this study (which I haven't read) could fail to take into account is that people have very different motivations and very different levels of social orientation (how driven are they by social concerns, approval of others, status, power, privilege, etc.)

Another possible axis could involve the Maslow hierarchy of needs. Someone who would otherwise be keen to acquire status & power but heavily in debt might choose the less status friendly option 2.

Anonymous said...

Hi, hire me! Over the course of my career I got autistic enough to value absolute monetary quantities instead of comparing myself to yet another human environment at the workplace. ;)