Employees tend to compare their pay levels to other individuals in order to decide whether they are satisfied with their pay or not. Employees tend to be dissatisfied when they are paid less than the highest paid individuals in their same field with the same level of skill and experience. Interestingly, employees also tend to be dissatisfied when they are paid more than the lowest paid individuals in their same line of work who have similar skills and experience. However, the level of pay dissatisfaction was much lower when compared to the lowest paid employees versus comparison to the highest paid employees.
Source: Harris, M. M., & Anseel, F., & Lievens, F. 2008. Keeping up with the Joneses: A field study of the relationships among upward, lateral, and downward comparisons and pay level satisfaction. Journal of Applied Psychology, 93, 665-673.
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