How happy we are with our salary depends on how much we think other people earn. More specifically, Paul Sweeney and Dean McFarlin (University of Daytona) predicted, it is how much we think people similar to us earn – others with the same job, or who work at the same company. Their prediction was based on Leon Festinger’s ‘social comparison theory’.
To their surprise, however, Sweeney and McFarlin found that people’s pay satisfaction was more widely affected, being predicted not only by whether they thought people with the same job in their own company earned more or less than them, but also by their sense of how much people earned doing different jobs from their’s, either in the same or a different company.
So why isn’t a person’s satisfaction affected more by ‘similar others’ as psychological theory would predict?
“Similarity is in the eyes of the beholder”, the authors said. “Perhaps respondents who are mobile and in a well-defined industry with clear competitors identify more with their counterparts in other organisations than with co-workers doing the same job”.
Regarding comparison with people in different kinds of work, the authors suggested “such comparisons might provide workers with a sense of how their jobs ‘stack up’ with respect to other occupations…It may be that pay level is the most overt marker of one’s status…if this plays an important role in defining the self in our society then our findings become more understandable”.
“It may also explain an apparent obsession in today’s world with lists of the richest people”, they added.
The researchers surveyed 235 engineers at an American public utility company, 31,645 employees of the U.S. Federal Government, and 1,387 people with a range of different occupations.
Sweeney, P.D. & McFarlin, D.B. (2005). Wage comparisons with similar and dissimilar others. Journal of Occupational and Organizational Psychology, 78, 113-133.