During the monsoon of 2005, I was in Hongkong for an international seminar on Happiness and Public Policy at Lignan University. One of the evenings while we visited IFC mall, a big board displayed in one of the lobbies of the mall caught my attention which read as - Whoever said money can’t buy you happiness simply didn’t know where to go shopping. It seemed as if shopping made people happy provided one had money to spend. Elizabeth Dunn of University of British Columbia suggested through research that spending money on others makes us happier than spending for ourselves and further it is the experiences that we pay for adds to our happiness much more than the material things that we buy. Investing in others makes us feel happier and healthier even when it might make us poorer by few bucks.
Seminal contribution of Richard Easterlin (Easterlin Paradox) help us understand the relationship between money and happiness much better. Increase in incomes (at national level) does not result in corresponding increase in happiness. Money plays an important role in fulfilling basic needs of individuals but once these needs are met, the role of money start deteriorating and other factors such as satisfying experiences become more important. Hence this paradox questions a generally held belief that money makes people happy. It does in a sense that it provides for the need of existence but not beyond that in proportion.
My academic interest in the study of happiness is able to convince me that happiness can’t be bought with money. However it is not to say that money does not motivate employees to make choices with respect to one’s workplace. Taylor’s thinking on management was driven by the fact that better incentives lead to better productivity. Fordism believed in extracting best out of employees and providing them rewards in terms of money. Fayol gave us a principle of fair compensation. All these management theories considered employees as resource and suggested better ways to reimburse for their efforts put in the organizations. More efforts, more results, more money.
Money is one of the important motivators as it results in better job satisfaction viz-a-viz life satisfaction. But it is not that it is most important factor and it would keep on motivating employees forever. It would respond to Easterlin Paradox and its role shall start moving slowly from front to backseat. More important is the question - Is that only money which shall decide whether a talented employee shall stay or leave an organization or Is that only the salary which shall determine his/her satisfaction? This needs attention from individual happiness perspective.
More than money it becomes important for an employee to have better work environment, better relationship with boss, subordinates and peers, better growth opportunities, better sense of achievement and accomplishment, better use of time in leisure activities, better quality of work life, lower stress levels etc.
These are important variables for job satisfaction and organizations have to put in place better HR policies to assure an improvement in job satisfaction levels of employees not just through providing better incentive plans but through providing them better work environment and better work place experience. Satisfaction leads to happiness whether it is at individual level or at organizational level or for that matter whether it is at national level. As stated by Elizabeth Dunn - it is the investing in others which makes one happier and healthier, if organizations learn from this and keep on investing in their employees, it would certainly make the individuals working in the organization happy and would transform an organization into a state of happy organization.
Money is a motivator but not the greatest of all.