R-E-S-P-E-C-T

They say people don’t work for money, but if they don’t work for money, what are they working for? There are lots of ‘studies’ by HR consultants etc. but most of them are not really statistically sound (which is a general problem in HR consulting) so I was glad when I found a new study by Jason Stockin that uses some proper econometric analysis.

First, for those who don’t know it, let’s recall that getting more money at your job does increase job satisfaction, but only to a point. The common result of research on job satisfaction is that somewhere around an annual income of $60,000 to $90,000 job satisfaction, happiness, and life satisfaction reach a plateau, beyond which additional pay rises don’t add much.

Hourly pay and job satisfaction

Source: Stockin (2022)

The common explanation for this observation is that once basic needs are met, people no longer work for money alone. So, what do they work for? Analysing ratings on Glassdoor, Stockin came up with a ranking of all kinds of amenities ranging from fringe benefits to working conditions. The chart below shows the selection of amenities that increase the average rating of a company the most when holding all other criteria constant. I have added pay, bonuses, and the current hobby horse of HR Consultants of Work from Home (WFH) to the chart as a reference.

Increase in Glassdoor rating by different work amenities

Source: Stockin (2022)

It probably doesn’t surprise anyone that cultural factors lead the way. The way managers and corporate leaders act and treat their colleagues makes a huge difference to job satisfaction. A good leadership team is worth 0.3 to 0.4 out of 5 stars. Compare that with the increase in job satisfaction from higher pay, a large bonus or the ability to work from home. None of these have a statistically significant impact on job satisfaction and the average increase in job satisfaction is 0.1 stars out of 5 or less.

But the one thing that has the biggest impact is being respected at work. Disrespectful or abusive managers and colleagues are the worst things for job satisfaction and businesses that tolerate such people will pay the price, either by good people leaving or by employees quitting mentally and reducing their efforts at work to the bare minimum.

There really should be no tolerance for disrespect and abuse at the workplace, but who am I kidding? I have worked in the financial industry for more than 20 years. There are plenty of toxic work environments there and an awful lot of people work for money and bonuses alone and don’t care about the environment they create. As always, the results are probably correct on average, but what matters to you and me every day are the outliers that ruin your life or that make your work a joy. And throughout my career, I have learned one lesson: Don’t go for the money but for the people. If you work with idiots, leave. If you work with nice people, stay, and don’t worry too much about your salary or your bonus. No amount of money can compensate you for the misery of a toxic workplace.