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Salary and Compensation

Many would argue that if an employee receives a decent salary, he or she will be satisfied and remain with the organization. What are your thoughts on this statement? Does compensation motivate behavior? Do people join a firm because of pay? Do people stay in a firm or leave a firm because of pay? Do employees agree to develop job skills because of pay? Do employees perform better on their jobs because of pay? Provide examples to support your answer and references

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This may seem like a reasonable argument at first but after more thorough consideration it simply doesn't stand up to the studies, polls, surveys, and anecdotal evidence that overwhelmingly prove otherwise. My research and reading on the subject has convinced me that salary has very little to do with job satisfaction or retention. Where it does, in fact, impact satisfaction, it does so in more complicated, and potentially negative, ways.
I do believe that a person might join a firm for pay in certain circumstances. A college graduate, looking to optimize his education and potentially begin to pay off student loans, may accept the highest offer he receives. Something to keep in mind, however, is that the graduate has likely not experienced working in corporate environment. This means that he's most likely unaware that the intangible aspects of a job and company, its culture, management style, mission, etc., even exist, let alone may significantly affect his happiness at work. Additionally, anecdotal evidence strongly suggests that you can make a more considerable salary jump by switching companies than by being promoted within your current organization. This is another reason, all things being equal, that a person may accept a job offer for pay.
Much more significant are the questions regarding the relationship between salary and motivation as well as salary and performance.

- The Harvard Business Review article has a TON of great quotes to show that there's almost no relationship between motivation, or engagement, and salary. (the only 2% overlap between pay and job satisfaction levels) Great quote: "In a nutshell: money does not ...

Solution Summary

This solution of 1084 words provides a review of the multiple ways salary/compensation might impact or affect job choice, job change, job satisfaction, motivation, and job performance.

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