Does money buy happiness? No. In fact, employees
who are primarily motivated by the love of their work
grow increasingly dissatisfied the more money they make,
according to a recent study at Berkeley’s business
and psychology departments.
The study found, as one may expect, that individuals
who are motivated by extrinsic values, such as money,
promotions, better office or parking spot, and other
external rewards, were increasingly happy the more money
More surprising, however, was the inverse relationship
between those who were intrinsically motivated and their
income. Intrinsically motivated people, or those who
receive their satisfaction from doing the work for its
own rewards, proved to be increasingly dissatisfied
with their work and their lives the higher their salaries
“In a capitalistic society, people generally
believe that—all other things being equal—being
rich is better. But that is not what we found,”
Chatman, the Haas School’s Paul J. Cortese
Distinguished Professor of Management, who collaborated
with psychology Ph.D. candidate Ariel Malka on this
The researchers studied a group of 124 MBA students
who completed their degrees between 1987 and 1992 at
the Haas School of Business. They determined the students’
motivational orientation based on their responses to
questions about jobs, career aspirations, and life circumstances.
They then conducted a series of follow-up surveys to
determine the participants’ job satisfaction and
subjective well-being, in some cases 10-15 years after
participants had received their MBAs (and participated
in the study).
The survey findings have important consequences for
how managers communicate the value of work and how they
reward their employees.
“The important lesson for managers is that they
don’t want the extrinsic rewards they give employees—raises,
better offices, or bonuses—to displace or undermine
the natural intrinsic rewards that people get for doing
the work itself,” said Chatman.
External rewards do not necessarily preclude enjoying
the intrinsic values of the work, the authors say. But
presenting rewards for engaging in an already appealing
activity can undermine that intrinsic motivation. As
a result, individuals may misattribute their motivation
and start to believe that they are extrinsically motivated
because they work in or chose a higher paying job.
The conclusion to managers is to make sure that their
employees are fully aware of the intrinsic merits of
their work, and that they don’t fall into the
trap of misattributing their eagerness to do the work
to some external reward for that work.
“Individuals have a fundamental psychological
need to feel as though their actions are freely chosen,”
Malka and Chatman add. “In other words, we all
need to feel that we are not just doing the work for
the money, and intrinsically motivated individuals need
to feel this even more so.”
The study alas does not prove that higher salaries
are the cause of the unhappiness of intrinsically motivated
individuals. Instead, these individuals may trade off
the content of the work for better pay, leading them
into a situation where they become unhappy because the
work is unfulfilling. In other words, higher income
might be an indication that a person neglected their
own values in choosing a job.
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