We all know the saying: money can’t buy happiness. That’s why, when presented with several options, many prudent job seekers won’t simply take the job with the highest salary. They know that salary is never the biggest determinant of happiness at work. This new study from Glassdoor proves that this is correct.

The study digs into factors that determine employee satisfaction. To crunch these numbers, Glassdoor “ran a linear regression with company satisfaction rating as the response variable and log-transformed total pay as the explanatory variable.” Other factors – like controls for location (state), gender, education, years of experience, job title, employer size, industry and employee status – were also used.

In other words, they used a complicated formula that considered many factors to find out what really makes employees happy.

Money Can't Buy Happiness -- Here's What Can Full Image (2)

What Glassdoor found was that an increase in salary has very little effect on employee happiness. The model showed that a 10 percent increase in pay resulted in a 1 point increase in overall company satisfaction on a 0-100 scale. So an employee given a raise from $40,000 to $44,000 would simply experience a 1 percent increased satisfaction with the company. This, combined with resulting diminishing returns to happiness for every extra $1,000 in earnings, shows that money doesn’t have a major effect on employee satisfaction.

So, if money doesn’t buy happiness at work, what does? Glassdoor analyzed the six top areas beyond salary that influence employee satisfaction:


  1. Company Culture and Values

Job engagement is a huge part of happiness at work. If you enjoy the work you’re doing, time will pass by faster and you’ll feel more fulfilled at the end of each day. In addition to being provided with suitable tasks, company culture plays a huge role in inspiring job engagement. Research from the University of Warwick found that happiness and engagement increases productivity by as much as 12 percent, a study echoing Glassdoor’s findings that company culture and values have the most prominent influence on employee happiness beyond salary.

A company with a positive culture often exudes trust and commitment in regard to employees, in addition to caring for their well-being. For example, businesses that provide fresh free food in the break room or organize a company-sponsored yoga class show that they care, not only about the duties employees are assigned but also their health and well-being. It’s a lot easier to be happier on the job if your co-workers are happy; a positive company culture increases the chance of office-round happiness and positive vibes by touting employee recognition and transparency.


  1. Career Opportunities

Just as it’s undesirable to make the same salary throughout an entire career, no one wants to be held to the same responsibilities and tasks either. Quality jobs offer room for advancement and opportunity based on gradual experience and accomplishments, igniting motivation among employees who realize they are working for their future in addition to the usual paycheck.

With career opportunities come a higher paycheck, in addition to new and stimulating roles. Many employees will take an unexciting salary if it means room for advancement in the future. Before starting a new position, it’s a good idea to discuss advancement opportunities, as keeping those opportunities in mind can result in increased motivation and overall happiness in working toward a goal.


  1. Senior Leadership

As most know, chaos and stress do not contribute positively to happiness. These are often avoided in businesses with excellent senior leadership, whose presence is another defining factor of employee happiness. Many employees can get stressed when too much is on their plate. Senior leaders can navigate the complexity of key issues, strategize long-term courses of action and proactively manage, build and align stakeholders and financial resources, in addition to building the morale and igniting the passion of other employees. This role allows other employees to focus on the roles they excel at, rather than trying to overcompensate and getting stressed as a result.

When looking at a new position for employment, it’s useful to check the business’s website for a list of leaders to get a feel for the experience of the senior leadership at that specific company. Even a small bio or list of accomplishments can elude to senior leadership that can play a pivotal role in keeping employee happiness and morale high. Typically, businesses with absent senior leadership have lower employee morale, in addition to suffering consequential monetary losses.


  1. Work-Life Balance

Aligned with companies that promote a positive culture through perks like food in the lounge room or company-sponsored yoga lessons, businesses that provide a positive work-life balance often tout happy employees. This could mean flexible vacation days or the ability to telecommute a certain number of days. It could also mean an office with workstations that promote the comfort and privacy of a home, rather than mundane cubicles.

Businesses treat issues like paternity/maternity leave and vacations on an individual basis, so inquiring on these specific issues with HR or a supervisor is recommended. Even if you don’t plan to take leave right now, it’s useful to know for the future. Glassdoor found that the happiest employees were at companies that accommodated a positive work-life balance. That could be through flexible scheduling or commendable consideration for personal matters – like leaving work early to pick up your kids from school on specific days.


  1. Compensation and Benefits

Although Glassdoor found that salary and benefits had less of an impact on employee happiness than the four areas above, salary still obviously matters. Employees enjoy feeling that their work and time is appreciated. In addition to enforcing positive company culture and career values, allowing for advancement opportunities and accommodating a good work-life balance, businesses show this appreciation via fair compensation and benefits.

Still, it’s worth noting that several studies have reported that employee happiness stops increasing at a certain salary, depending on the state. Huffington Post found that range to be around $100,000 in costly living states like New York, Washington, D.C., California, New Jersey and Massachusetts, while residents in states like Kentucky, Tennessee and Mississippi found that money stopped increasing their day-to-day emotional well-being around the $65,000 mark.


  1. Business Outlook

For the hours upon hours that employees spend at their jobs, it can feel particularly soul-crushing if they have no stake in its success beyond a preset salary. One way businesses avoid employees feeling detached and consequently unmotivated is to offer stock options, either at a discount or as a part of their compensation and benefits package. For a business with a positive future outlook, stock options can motivate employees and provide them with a greater sense of purpose, as they allow employees to become truly invested in the business and serve as more than cogs in the machine.

Even beyond stock options, a business with a poor future outlook will cause employees to spend the majority of their time pondering their next career move for when the business goes under, as opposed to thinking positively about the future and their work reflecting that. A positive business outlook is clearly positively aligned with employee happiness and motivation, as Glassdoor’s studies found in regard to this and the other five areas that most influentially determine employee happiness.

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Sarah Landrum is the founder of Punched Clocks.

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