That’s the take-away from some research on compensation, the perception of fairness and the realities of satisfaction that comes to us from Kellogg School of Management Professor Neal Roese (who I was lucky enough to work with on a case study during my last quarter there).
An excerpt from the Kellogg Insight article on the research (emphasis, as usual, is mine):
In the popular ABC television drama “Nashville,” a young country music artist is discovered by a famous producer and offered a signing bonus. But the bonus is not cash—instead, it is a gorgeously restored, classic convertible sports car. The musician happily accepts this gleaming prize over the protestations of his manager, who reminds him that the car is worth much less than standard signing bonuses. But the advice falls on deaf ears. The young musician jumps behind the wheel of the convertible and speeds blissfully away, his hair blowing in the wind.
Why would someone be satisfied—happy even—with an obviously inferior reward? According to Neal J. Roese, a professor of marketing at the Kellogg School of Management, and Jingjing Ma, a doctoral student at Kellogg, it all comes down to how “countable” the reward is. The two argue that presenting rewards or bonuses in less quantifiable terms decreases the likelihood that recipients will compare rewards, which in turn increases their satisfaction.
Compensation specialists and managers everywhere should take note.
Read the rest of the very interesting article here.