A classic indicator for measuring the prosperity of a society is Gross Domestic Product (GDP). Since the early 1930's, accepted theory has held that as a society's GDP increased the wealth of its citizens improved. Further, such increases in prosperity were hypothesized to translate into higher feelings of individual satisfaction. In sum, the wealthier the country the happier, more fulfilled, and more content its citizens.
Beginning in the mid-1970s some researchers began to question the correlation between measures of satisfaction and GDP, arguing that after a certain economic level, increases in wealth have a much less pronounced effect on measures of contentment. In 2013, economist Richard Easterlin further refined this critique concluding that only relative income is linked with satisfaction. Meaning, if overall measures of prosperity increase, but people are not able to compare their wealth relative to others then they will not be happier. Our perception of ourselves is linked with how we view our peers.
Our 2016 election cycle continues to proliferate this conclusion. In a nation with tremendous wealth relative to the rest of the world, there continue to be marked emotions of dissatisfaction and malcontent among many Americans. Happiness, or perhaps more acutely, satisfaction are complex dynamics that involve not only feeling positive about oneself, but also functioning well in jobs, relationships, and community.
Why is this important for organizations to consider? For several reasons:
First, it's important to recognize that employees and managers are able to think themselves into dissatisfaction even when indicators of their own performance and compensation are above-average. Therefore, peer reviews or the review process should consider questions targeted at themes of fulfillment and purpose, not strictly project accomplishment.
Second, compensation is relative. I'm sure you've heard this one before. If employee X realizes employee Y is making the same amount as her, then a glowing review from a manager may do little to quell feelings of frustration and regression. One method to combat this evolution is to make the compensation process hold some transparency.
Third, thriving, or flourishing as Martin Seligman coined, is an integrative process that involves not only feeling well but also acting well. Employers should consider striving to develop programs whose outcome is relational, rather than only quantitative. Success is an elusive metric that must be captured by combining project accomplishment with relational value.
Fourth, wellbeing is a reality that employees have a shared responsibility to pursue. Compensation, praise, and accolades accomplish only part of idealized wellbeing models. Feeling positive and functioning effectively are related, but distinct operative tasks. Employees must strive to become aware of their interpretation of their own circumstances relative to their peers. Confronting and learning to identify one's own attitude is key to growth in all sectors of engagement.