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Investor psychology | More than money

Illustartion: Karl Hilzinger

Would you accept a lower wage to work in a sociable environment? Where you trusted management? Where you worked co-operatively with colleagues? In other words, where you enjoyed the company of others?

Researchers into what could be loosely termed the “economics of happiness” suggest you would. For example, working in a place where trust in management is one point higher on a 10-point scale gives the same improvement in life satisfaction as having a one-third higher income, writes John Helliwell of the University of British Columbia in a paper for the US National Bureau of Economic Research. In a similar vein, the sense of satisfaction gained from a strong sense of belonging to your community is equivalent to what you’d achieve by trebling your income.

It was Adam Smith, in the 18th century, who suggested that the more disagreeable the work, the more those unfortunates doing that job would need to be compensated. That was probably the first step on the long journey to trying to understand what motivates workers and how happiness can best be pursued and measured.

Our biology holds a clue here. Evolutionarily speaking, brains are expensive: they take up 2 per cent of our body weight but use 20 per cent of total energy intake. Why are our brains so big? Scientists reckon that we need larger brains – and in particular the more recently evolved prefrontal cortex – to handle the complexity of our social systems.

This “was justified, despite its substantial resource cost, by the great benefits from these more complex social interactions”, Helliwell says. In other words, there’s evidence that our bulging brains have “been crucial in allowing humans to be the most social beings, living better lives through co-operation”.

In the workplace, making the most of our evolutionary gifts would entail structures – physical and organisational – that maximise the possibility of interaction and collaboration.

Broadly, findings of this nature support the insistence of many HR departments and bosses that “it’s not about the money”. Finding room in the budget for pay rises is hard, but given the kind of pay-offs on offer from improving workplace culture, making employees happier in other ways must be even harder. Or else we’d all be skipping to work.

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