A major league baseball player tells his team that he won’t
be reporting to spring training. Although he’s under contract,
and scheduled to make $7.5 million dollars this season, he says
he’s not motivated to play this year. He wants his team to either
renegotiate his contract or trade him so he can get more money.
Neither this player nor his agent ever suggests that $7.5 million
is inadequate to live on. The argument is almost always
couched in terms of relative rewards: “Other players who aren’t
as good as I am [haven’t played as long; haven’t won as many
games; don’t have as impressive statistics] are earning more.”
There is an impressive body of evidence that tells us that
employees don’t only look at absolute rewards. They look at
relative rewards. They compare what inputs they bring to a job
(in terms of experience, effort, education, and competence)
with the outcomes they receive (salary levels, pay raises,
recognition, and the like). Then they look around for other
references to compare themselves against. Those other
references may be friends, relatives, neighbors, coworkers,
colleagues in other organizations, or past jobs they have had.