Does Money Buy Happy Employees?

Kathy Rapp Audacious Ideas, Change Management, Communication, Compensation/Cash Money, Culture, Driving Productivity, Employee Engagement, Engagement and Satisfaction, HR, Performance, Talent Strategy

Recently, I was lucky enough to go to a private screening of a new documentary, “Pursuing Happiness.” The director, Adam Shell, shared wonderful stories of the people he interviewed in his attempt to find the happiest people in America.

“Who is the happiest person you know?” was the question he and his production partner posed.

My friend who hosted the screening submitted her blue egg producing chickens as the happiest…because come on, who is happier than a hen who can lay blue eggs?!? Adam had to come see her chickens, and while the chickens didn’t make the cut, what a freak’n awesome story she now has to tell!

The second part of the film asks the question, “What are we doing wrong?” and explores the relationship between money and happiness.

Most of us are coming off year-end compensation planning and communicating new salaries and/or new programs and dealing with happy, neutral, or dismayed employees. While research and experience tells us there is a relationship between money and happiness, no one really knows exactly what the relationship is.

Are wealthy individuals happier?

Does a “cost-of-living vs. merit” increase make a difference?

Does paying for high-performance create a culture more focused on individualism?

As organizations continue to struggle to solve for attraction, retention, engagement and performance motivators, it’s important to remember that compensation strategy is just an element of the solution. Those organizations who take a holistic view of their talent strategy are more likely to end up with engaged employees who understand a total rewards picture.

Some questions to explore with your leadership teams:~

  • Outside of what we pay employees, what are the biggest drivers of performance or innovation?
  • How do we maintain/increase the “excitement” about an offer to join our company past 12-months of employment?
  • How does our compensation structure impact innovation? Agility? Culture?

As HR folks, we can also be too close to the compensation subject and should not try to “control” it for an organization. I’ve found working with a financial planner is better for our family as it gives us an unbiased and data-driven view of what we have/what we need to do. Similarly, creating a portfolio of internal and external resources – comp specialists, your CFO, organizational effectiveness consultants, change management leaders, etc. is a way HR can be accountable, but also help drive an unbiased conversation across many resources to get to the right solution(s).

Does money buy happier employees? It’s a great question to dive into for your organization – and yourself.

If you spend your days doing what you love and your evenings with those you love, you’ll have a rich life – even if you aren’t rich.”