Professors Elizabeth Dunn and Michael Norton had a burning question and set off to research it – What is money’s real impact on happiness? The results might surprise anyone with a dream of winning it big in the lottery. And, it provides insight into building workplace happiness.
They found that more than having money, the way we spend it affects happiness. Spending money on ourselves doesn’t create nearly as many good feelings or satisfaction as spending money on others. The research shows that having or making more money actually has no impact on daily feelings of happiness.
Invest in Others to be Happy
Dunn and Norton’s research shows that people are more satisfied with money when it’s invested in others, whether it’s donating at church, treating a friend to lunch, or supporting a charitable cause. And the amount invested in others doesn’t make a difference. Even as little as one dollar spent on someone else can make you feel happy.
In their book “Happy Money: The Science of Smarter Spending,” the researchers describe many different scenarios they researched about different ways people spend money and how they affect happiness. A common finding is that more spending does not mean more happiness, unless it’s spending on others. Common misconceptions about spending money include thinking “If I have more to spend on myself, to buy more new shoes, or to buy a more expensive new car, I’ll be happier,” and if someone else has more money than I do, they are happier than I am. Dunn and Norton found that giving more consideration about spending before making a purchase that we think we really want, and diverting funds to spend on others instead of ourselves, results in more real satisfaction than a big shopping spree or only spending money on ourselves.
Dunn and Norton point to Bill Gates and Warren Buffet’s partnership to ask billionaires to pledge their wealth to charity, and Buffet’s actually doing so, as examples of how money can buy happiness in the workplace. Mr. Buffet is spending his money on others rather than accumulating it to spend on himself, and says he is happy to do this because spending more on himself wouldn’t make him happier.
Outrageous perks attract and retain employees and give employers a competitive advantage in the war for talent. Forbes reports that employers at growing companies spend money to make sure their workforce is happy and to be more attractive to prospective employees. Google paid for 100,000 hours of massage for its employees in 2012. And employers are willing to spend money on odd perks to make employees happy at work, such as AOL’s custom printed toilet paper and Thursday cocktails and karaoke. Some other companies that spend big money to make employees happy include Facebook, giving four months of paid maternity, reimbursed daycare and adoption fees, and $4,000 new baby gift, and Airbnb giving annual $2,000 travel bonuses.
Although the old adage “money can’t buy happiness” is true on some levels, in the workplace, employers who invest in their employees create engagement and a solid employer brand that makes candidates want to work for them. Employees feel more loyal, work harder, and make extra effort when their employers care about them enough to reward and invest in them. Let employees reward co-workers and you’ll stimulate that wonderful feeling of happiness.
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