Why does a good salary not equal job satisfaction.

Our studies have shown that approximately 50% of people in the workplace believe that they are significantly underpaid. We also found that only 11% are perfectly happy with what they are being paid.

This is probably not surprising. Research https://www.payscale.com/data/pay-satisfaction actually suggests that whilst underpaid workers are particularly unsatisfied, overpaid workers aren’t much happier. Our data shows that this trend, although perhaps more pronounced towards the lower pay grades, is still very much present at higher pay grades, including executive level.

The bad news is that you probably can’t afford to pay people enough to keep them happy. We can safely say that a happy, engaged & contented employee is not something you can simply buy.

Make Compensation Procedures more Transparent

Luckily, there is a step you can take to improve levels of pay satisfaction. This is to make the compensation procedures more transparent. This will only work for you if you actually compensate people fairly though. If you are not paying your people fairly, making the things transparent may do more harm than good.

Job satisfaction – Moving beyond pay

Pay satisfaction is not the only variable that affects job satisfaction and engagement levels. It, in fact, is not even the most significant variable. The silver lining in this is that leaders can actively earn engagement and make work meaningful and satisfying that without paying people a cent more.

The first thing you must remember is that the job of leadership doesn’t end when salaries and contracts of employment are agreed; it only starts there. Leadership, even in a business context, is a relationship of power. This is one of the things that leaders struggle to understand most often. This way if thinking about leadership goes against how most of you would think about leadership. Most people think of leadership in business as a market exchange between employer and employee. People believe that it is governed only by the law of supply and demand.

In Leadership: The Care and Growth Model, Etsko Schuitema outlines the errors of the market exchange view of leadership.


The first unfortunate consequence of the market exchange view of is that it turns the relationship into a constant negotiation about price. The problem with this is when you are busy negotiating, you have a very specific aim in mind. Every negotiation is about getting as much as you can for giving as little as possible. In a work context, the consequences of this obvious. Industrial conflict and unending disgruntlement about pay, which we see evident in the data.

Not only does the market exchange view have this unsavoury consequence, it also actually misrepresents the truth of the relationship. This view of leadership in business suggests that labour is something that can be bought, which in turn suggests that the leader is, in some sense, able to own the labour of his/her people. This is an amoral confusion of the matter. You cannot buy labour like you can buy a bag of apples. Someone else’s labour is not something I can own. Their labour happens when they deliberately chose to put in effort. Your labour is a contribution that you have to willingly make. Leadership is not about owing the labour of others, that is not possible, it is about earning the right to tell them what to do by earning their commitment.

This comes at a price, what we sometimes call the price of leadership. To find out more about the price that leaders need to pay to earn commitment, loyalty, trust and job satisfaction, consider reading Etsko’s book on the subject Leadership: The Care and Growth Model

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