Salary Evaluation and Self-Esteem: How Your Earnings Impact Your Personal Worth Perception
Chatting About Cash:Uncovering the link between income and self-worth, and how to negotiate for the salary you deserve!
Salary Hikes and Austrian StrifeIn recent years, salaries have surged due to inflation, but a survey reveals that 4 in 10 Austrians feel they're losing ground on their hard-earned cash. This squeezes their budget and may even impact their self-worth.
Science Verdict: Is More Money Equal to Higher Self-Worth?
Studies affirm that high income boosts self-esteem, pride, contentment, and lowers anxiety, as stated by the American Psychological Association in their 2021 survey of over 1.6 million individuals from 162 countries. The researchers from the University of Zurich's 2023 study of 4,100 Dutch adults echo this, finding that self-worth goes hand in hand with income, regardless of factors like gender, age, and education. Yet, it's essential to remember that this doesn't imply less favorable prospects for lower-income earners.
According to Vienna-based HR expert Martina Ernst, focused on fair compensation, self-worth is significantly determined by setting life priorities. "Someone who prioritizes hobbies, family, societal themes is likely to view salary as a necessity, while someone striving professionally sees a salary increase as validation of their performance." That's backed up by Gehaltsexpert Conrad Pramboeck, who's analyzed salaries and their owners for decades, identifying four personality types and their attitudes towards money.
Salary Check: Which Type Are You?- Performance-Driven: This type views salary as feedback on performance and effort, striving for bonus systems and performance-based raises. Classic profession: Sales.- Security-Seekers: They yearn for stable income and need their salary to be steady and adjusted regularly.- Freedom Lovers: Freedom and flexible working hours are more important to them than salary; they might reduce hours for this.- Meaning-Seekers: This group thrives on social recognition. A fair salary matters, but recognition is paramount. Common profession: Non-governmental organizations (NGOs).
However, none of these types are exempt from the social comparison trap. According to Pramboeck, the actual salary's value matters little; it's comparison that sets the stage. Approximately 80% of one's salary satisfaction hinges on whether one earns more than others, not on whether one can afford what one desires. This can be problematic.
Comparisons extend beyond colleagues in the same field, ranging to friends and family with diverse professional backgrounds. It's unlikely that one knows a counterpart's exact salary, so estimations are based on factors like car, neighborhood, and lifestyle.
To ascertain if your salary aligns with your position and market value, Ernst and Pramboeck suggest starting with online salary platforms like Glassdoor or Stepstone.eu. ChatGPT also proves a reliable source. When in a higher career stage, experts recommend conversations with mentors, networking, or consultations with HR experts if you discover you're underpaid during your research. Subsequently, negotiations are a must! As Ernst advises, "Those who don't ask, won't get."
The EU Pay Transparency Directive must be incorporated into national law by June 2026. As Ernst clarifies, "[Then] companies will be obliged to inform employees about their individual salary development and the average salary for equivalent or comparable positions within the company." For more on how 100% salary transparency in companies looks like, read here.
Comparing Selves: Friendly or Perilous?
“Comparing with others can make us ecstatic or sick, but only as long as salary is a taboo topic,” warns Ernst. “Once we begin depersonalizing it, we realize which positions are currently market-valued. This could be the starting point for comparing economically well-compensated roles with undervalued counterparts,” she says. Ultimately, salary is the price companies are willing to pay for a specific function, and its value is about the function's worth, not the individual.
(our website, JC)
- The study conducted by the University of Zurich in 2023 agrees with the American Psychological Association's 2021 survey, stating that economic and social policy, such as income, has a significant impact on psychological factors like self-worth.
- In the year 2023, when focusing on personal-finance and careers, understanding the type of person you are in terms of salary negotiation can help, such as the Performance-Driven, Security-Seekers, Freedom Lovers, or Meaning-Seekers.
- According to Gehaltsexpert Conrad Pramboeck, business leaders in Austria should be aware that salary satisfaction among employees largely depends on social comparison, not just income level.
- In an effort to promote fairness in finance and careers, the EU Pay Transparency Directive requires companies to disclose individual salary information and market rates by June 2026.
- To support one's career growth and personal-finance, it's essential to engage in salary discussions with mentors, network, and consult with HR experts if necessary, as Vienna-based HR expert Martina Ernst suggests.