How satisfied are you with your salary?

Traditional economic theory tells us that the larger the reward for a particular action the greater your motivation. In other words you judge the value of the monetary rewards of your workplace based 100% on the absolute size of what you get. But observations have shown that the relative amount of one's reward is as important if not more important than the absolute amount. It's easy to imagine receiving a bonus that you are very happy about until you hear that the under performer in the office next to yours got a much larger bonus. Suddenly you are not too happy with what you got. Even though according to economic theory what other people get shouldn't matter to your own feelings, they do.

Economists and brain scientists at the University of Bonn, Germany, decided to see what they could learn about this seemingly innate comparison behavior by conducting a series of experiments. Their findings have been published in a recent edition of the academic journal "Science."

The researchers conducted a series of "games" where participants performed similar tasks but received different financial rewards for doing so. The subjects were hooked up to brain scanners so that the researchers could see changes in their brains as they received their rewards and then learned what the other subject was earning for doing the same work.

The neuroscientists focused on a region of the brain they called the "reward system." Then, taking a closer look at those cases in which both players successfully performed the task they observed:

If the participants received the same payment there was relatively moderate activation of the reward centre. But if player one was given, say, 120 euros, while his partner received only 60, the activation turned out to be much stronger for player one. For player two, on the other hand, the blood flow into the ventral striatum actually decreased even though he had performed the task successfully and had been rewarded for his efforts.

In short, our brains are wired to feel best when two criteria are met. First, we receive a reward for successfully accomplishing a task. Second, that the reward is commensurate or in fact larger than what others are getting.

Organizational managers know this since it is almost cliche than when handing out bonuses or raises bosses will tell subordinates that in comparison to their co-workers what they are receiving is very good. They will then caution the employee to not tell anyone what they are getting "to avoid demotivating others." In reality, since salary/bonus information is often kept secret, they could be telling everyone the same thing. And it would be hard to blame them since they are just applying the latest neuroscience of motivation.