Happiness, Adaptation and a Different Salary Strategy

Let's play with a little different way of paying people, that just might contribute a little bit to employee happiness. Since most of our employees are human, we need to consider the nasty human tendency to get used to things.

Think of some first times in your life: The first time you try a fabulous new recipe, or buy a new car, or get a great new pair of shoes, it's very exciting. You are happy - for a while. But after a while, the new recipe doesn't taste quite so good, the car becomes just a car, and you see a new pair of shoes that makes your old pair seem pretty shabby. You start looking for other things, for more, for better - to make you happy again. Psychologists call this human tendency adaptation, and it directly affects our happiness as we move through life.

When we get something that we see as an improvement, we're happy. When we get a raise that seems fair and adequate, we're happy. But very quickly, we adapt to this new situation, our expectations change, and we now compare things to this new situation, rather than the old situation. That is adaptation.

In business, we usually give people pay increases once a year at most. The first pay cheque after the raise is usually a pleasant surprise, but after that the amount is exactly as expected. With the automation available in modern payroll systems, it becomes practical to increase the pay rate every paycheque. That way, employees get 12, 24 or 52 little increases each year (depending on your payroll frequency) rather than one; they get 12, 24 or 52 little wins, rather than one big win. Each pay cheque, they earn a little bit more than on the previous one.

Research shows that, from the point of view of human brains, a win is a win is a win; the size of the win has little to do with the positive emotions it generates. Our brains notice that something is a good thing first, and then our brains look at the size of the good thing.

Explore this kind of thinking as you design your pay systems and scrutinize the capabilities of your payroll suppliers. It won't magically solve your problems, but it is aligned with what we understand of human psychology.

Has anyone else out there tried something like this?