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September 08, 2008
Study: Relative Pay Important to Employee Satisfaction
Findings of a recently released study suggest that employee satisfaction is impacted more by an individual's pay relevant to his or her peers than the individual's absolute (or actual) pay.

As reported in the journal Industrial Relations, the authors of the study interviewed undergraduates and asked them to rate how satisfied they would be with several different potential wage offerings for their first job out of college. Researches also analyzed responses regarding workplace satisfaction from 16,000 employees for the study.

The authors found that employees care about more than just their actual pay. According to the study, they were "more concerned with their income relative to the salary levels around them in their workplace." They were concerned with both relative income as well as the "the rank-ordered position" of their wages within a comparison set.

"Results show that human well-being depends in a particular way upon comparisons with others," the authors concluded.

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