Does Wage Rank Affect Employees' Well-being?

How do workers make wage comparisons? Both an experimental study and an analysis of 16,000 British employees are reported. Satisfaction and well‐being levels are shown to depend on more than simple relative pay. They depend upon the ordinal rank of an individual's wage within a comparison group...

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Bibliographic Details
Published in:Industrial relations (Berkeley) 2008-07, Vol.47 (3), p.355-389
Main Authors: BROWN, GORDON D. A., GARDNER, JONATHAN, OSWALD, ANDREW J., QIAN, JING
Format: Article
Language:English
Subjects:
Correlation analysis
Great Britain
Happiness
Job satisfaction
Labour relations
Ranking
Satisfaction
Studies
United Kingdom
Wage rates
Wages
Wages & salaries
Well-being
Workers
Working conditions
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Summary:How do workers make wage comparisons? Both an experimental study and an analysis of 16,000 British employees are reported. Satisfaction and well‐being levels are shown to depend on more than simple relative pay. They depend upon the ordinal rank of an individual's wage within a comparison group. “Rank” itself thus seems to matter to human beings. Moreover, consistent with psychological theory, quits in a workplace are correlated with pay distribution skewness.
ISSN:0019-8676
1468-232X
DOI:10.1111/j.1468-232X.2008.00525.x