Does money motivate people – what’s the truth?

Does money buy happiness in your opinion?

If yes, to what extent? 

If not, why not?

Many years ago, before I got into psychology, I thought that money surely can motivate people to work better, more quickly and efficiently; and no matter what your job is that money can enhance performance.

Many of us are trying not to focus on material things too much, but sometimes it may be really challenging. We know or hear about people who are driven by fame, power and money, but they don’t always seem to be happier with their life.

There are actually many rich and famous people whose lives are far from ideal, although at first they may look fabulous: they have public recognition, fans, attend parties, and are able to afford houses and fantastic trips all over the world. Then when we look at someone’s life deeper, even though it seems full of blessings, it actually may be an empty and dark place filled with anxieties, depression or drugs.

The rich and famous sometimes can’t handle the social pressure, the expectations from the public and the high standards imposed by the industries they work in.

We often think … if we were rich the bad stuff and feelings surely wouldn’t happen to us and we would certainly know how to keep sane, responsible and in charge of our lives. We may think this but life isn’t as easy as it seems, even if one has money. Even the nicest and most noble people get lost and need to fight loneliness, cancer or depression. And sometimes they lose like in the case of Robin Williams and many others…

What have academic studies recently found out about the impact of money on our happiness and motivation?

According to the Harvard Business Review, studies show that, even if employees decided how much they earn for their work, they probably wouldn’t enjoy their work more!

The link between money and motivation or performance is much more complex than we think. Tim Judge and his colleagues analysed 120 pieces of research on this topic and concluded that there is actually a very weak link between money and job satisfaction.

“Employees earning salaries in the top half of our data range reported similar levels of job satisfaction to those employees earning salaries in the bottom-half of our data range.”

What’s interesting, and no matter how ridiculous it sounds, in non-physical jobs particularly, financial rewards can actually distract and demotivate people, and some tasks can be done even more slowly and less effectively than before!

Scientists believe that we should focus on our intrinsic motivation (own satisfaction) because it is a stronger predictor of our job satisfaction and/or performance.

Of course, research findings are only average and we need to remember that everyone is different and has different motives. Financial goals motivated by the pursuit of power or boosting our confidence (using the money for cosmetic surgeries, for example) will be a lot less rewarding than seeking a bigger income to meet needs related to security or family support.some-people-are-so-poor-all-they-have-is-money

For employers, a far better prediction of an employee’s job satisfaction is their personality traits rather than income:

“The more emotionally stable, extraverted, agreeable or conscientious people are, the more they tend to like their jobs (irrespective of their salaries)… but … the biggest organisational cause of disengagement is incompetent leadership. Thus, as a manager, it’s your personality that will have a significant impact on whether your employees are engaged at work, or not.”

If you are interested to find out more about this fascinating phenomenon, have a look at the Harvard Business Review article HERE

You may be interested in this great book too: Art of Money: A Life-Changing Guide to Financial Happiness by Bari Tessler available here

Happy Wednesdays! So what EXACTLY does science says? – part 1

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Sometimes, when reading academic textbooks and articles on happiness – which is called subjective well-being SWB in research literature – I was REALLY surprised by new findings. We think, for example, that having children would make us happier and then… what do we find out? 😉

Research found that happiness IS NOT related to:

  • Physical attractiveness! Striving to look as perfect as possible and spending a lot of money on clothes, make up, and cosmetic surgery does not equal happiness – this can be quite surprising for some people.
  • Age! Some of us worry about getting old to the extent that we may think that older means unhappy! There are various findings, sometimes contradictory, about this aspect but most studies emphasise that your happiness level doesn’t depend on your age much or at all!
  • Money! When you meet your BASIC needs there is not much difference between someone who is earning a low or average wage and a filthy rich person in terms of happiness! I know it may sound unbelievable for many people. Kasser in The high price of materialism (2002, available here) proved that actually desiring and focusing on the pursuit of wealth would make you LESS HAPPY! And quite often the more we have, the more we want!
  • Gender. What’s interesting is that women have a greater tendency towards being depressed… but also towards being more joyful!

I found a picture which I think may be able to explain these findings… 😉

TYPICAL DAY IN A MAN’S LIFE:

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TYPICAL DAY IN A WOMAN’S LIFE:

01

  • Educational level
  • Having children! Although some clarification is more than needed here 😉 It was found that having children who are up to 5 years old or teenagers makes us actually LESS HAPPY! However, children can make our life more meaningful and what’s interesting (in spite of all the stress and worries), parents live on average longer!
  • Moving to a sunnier climate
  • Crime prevention
  • Housing
  • Objective health (what your doctor tells you about your health – how good your blood test results are, what you are diagnosed with, etc.)
  • Environment & genetics! Even if in your genes there is some coded predisposition towards becoming unhappy or depressed, if you grow up and live in a positive, engaging and encouraging environment you can actually become HAPPIER than someone who has genetic predispositions to be content!

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