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Why are some people satisfied with their work and others are not? Is it because of their compensation, perks, their career path or other reasons? Having answers to those questions are invaluable in organizing work, supporting engagement and productivity, and supporting employee well-being and happiness.

A new study published by the Institute of Labor Economics by Milena Nikolova at the University of Groningen, Brookings and IZA, and Femke Cnossen at the University of Groningen researched this issue and published some important findings.

The researchers are the first to explore the determinants of work meaningfulness. They report: “Specifically, using three waves of the European Working Conditions Survey, we show that autonomy, competence, and relationships explain about 60 percent of the variation in work meaningfulness perceptions. Meanwhile, extrinsic factors, such as income, benefits, and performance pay, are relatively unimportant. Meaningful work also predicts absenteeism, skills training, and retirement intentions, which highlights the concept’s economic significance.”

 Other studies relying on self-reported and experimental data have challenged the assumption that only monetary motivations matter in the labor market  In fact, one convincing piece of evidence for the intrinsic value of work is the enormous psychological cost of becoming unemployed, which by far exceeds income losses.

 The researchers contend that autonomy, competence, and relatedness are about 4.6 times more important for meaningfulness at work than compensation, benefits, career advancement, job insecurity, and working hours. Relatedness, they argue, which reflects supportive relationships with colleagues and superiors, emerges as the most important factor for work meaningfulness.

These findings highlight the greater salience of self-efficacy and intrinsic motivation for meaningfulness compared to objective working conditions and monetary rewards.

Second, the researchers show that perceptions of meaningful work have implications for labor economics because they meaningfully predict retirement intentions, absenteeism, and skills training. For example, they say, “a ten-point increase in work meaningfulness reduces absenteeism by about one day per year and raises the intended retirement age by 2.5 years, on average.”

Despite this research by economists and other research by organizational psychologists which come to similar conclusions, the majority of leaders in organizations and employers believe that compensation and perks are the best motivators for employee satisfaction in their work.

Also, the “Great Resignation” has shown us that the conclusions of this research are clearly connected to workers’ dissatisfaction with their jobs.