Why a Higher Salary Won't Necessarily Make You Happier at Work

Career opportunities, quality of leadership found more meaningful than compensation


To be sure, higher salaries were associated with higher employee satisfaction. While 15% of users earning less than $30,000 a year gave their employer one out of five stars, just 10% of users earning upwards of $120,000 gave the same rating. On the flip side, while 40% of users making less than $30,000 gave their employer four or five stars, as many as 51% of users making more than $120,000 gave the same rating.

The caveat? A higher salary only makes employees a little bit happier. A more advanced data analysis revealed that a 10% increase in pay was associated with a mere 1% increase in employee satisfaction. So if you make $50,000 a year and you get a $5,000 raise, your satisfaction would theoretically rise from 75% to 76%.

When it comes to employee satisfaction, other factors could be more meaningful than salary. The researchers looked at different aspects of the workplace and found that employees valued them in this order:
  • Culture and values
  • Career opportunities
  • Senior leadership
  • Work-life balance
  • Compensation and benefits
  • Business outlook
This analysis adds to a growing body of research on the link between money and happiness. One study found that happiness levels off at incomes of $75,000 (or $82,000 in today's dollars). Another study found that the more money you have, the more money it takes to increase your happiness. The Glassdoor research is unique in that it puts salary in the context of other job attributes.

As Forbes' Susan Adams notes, it's likely that people making less than $30,000 would value compensation over other factors. But at the point at which you can take care of your expenses, save some money, and have a little fun, other aspects of your job may matter more than salary.

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