A Pay Raise That Doesn't Meet Your Expectations May Lower Your Job Satisfaction

A pay raise is generally regarded as a good thing. It means that you are being rewarded for doing a great job in the office. According to ongoing research by economist Dr. Eugenio Proto from the Centre for Competitive Advantage in the Global Economy at the University of Warwick, however, not everyone responds to money in the same way. Using data from the British Household Panel Survey and the German Socioeconomic Panel, the study author has found evidence that neurotic people may see a pay raise as a form of failure rather than success.

In psychology, neuroticism is a fundamental personality trait referring to a person's "tendency to experience negative emotional states." While neurotic people are usually predisposed to think negatively, how can they misconstrue added income as failure? According to Dr. Proto, a pay raise is seen as a measure of success. If they get a pay raise from a low salary, they are satisfied, but if they're coming from a high salary and the raise they get is lower than what they expected, it may be considered a form of failure. In turn, this lowers their life satisfaction.

While this may seem like a negative attitude, it also shows that people with high levels of neuroticism have higher expectations of themselves. To a certain extent, aiming for a better pay raise can motivate people to do even better in the future. However, it’s also important to be more appreciative of the small things in life. 

The paper is scheduled to be presented at next month's Economic and Social Research Council Research Methods Festival in the UK. 

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