Why A Bigger Purpose Can Mean A Smaller Payroll

Guest article contributed by JP Laqueur, Brand Foundations

What really brings your people to work every day? Is it a paycheck, or something deeper?

In a 2010 study, researchers at Princeton University found that increasing monetary compensation increased employee happiness (“emotional well-being”) only until about $75,000 of income, after which it showed diminishing returns. (It should be noted that the $75,000 figure is an average across the U.S. and the actual numbers vary by state and cost of living.)

But this makes intuitive sense. Raising an employee’s income from $35,000 to $70,000 can make a huge difference in their quality of life and potentially unleash incredible loyalty and productivity. They may actually care twice as much and put forth twice the effort because the additional compensation has fundamentally changed their basic emotional well-being.

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