Editor’s Note:
One of the most popular articles on Edition One of Humanise was a piece about how The Cost to Individual comes in direct conflict to The Cost to Company. It spoke about the tradeoffs we had to make, and asked us to evaluate if these tradeoffs were worth it. In this edition, Ria returns with the spiritual sequel to that piece. After conversations with multiple leaders, and her own experiences, she describe the point at which greater pay comes with diminishing returns and what ends up bringing joy from the work we do.  

How the relentless pursuit of higher pay in leadership roles may be undermining the very success it promises to deliver

Last year, I had a conversation with a friend at a Fortune 500 company who had just negotiated a 40% salary increase to switch firms. Six months later, she was miserable. The work felt hollow, the pressure was intense, and she found herself longing for her previous role despite earning significantly less there.

Her story isn't unique. In fact, it reveals a fundamental shift happening in how compensation affects job satisfaction as we climb the corporate ladder.

The relationship between pay and happiness isn't linear. Focusing too heavily on salary increases can actually backfire in measurable ways.

The Early Years: When Money Actually Matters

Before we dive into the paradox, let's acknowledge an uncomfortable truth that many purpose-driven career articles skip over: compensation absolutely matters, especially early in your career.

ADP's People at Work 2024 survey reveals that 73% of Indian workers are content with their salary; that’s a significant leap from 49% in 2023. With salary being the most important factor for 55% of Indian workers, job satisfaction rates in India remain the highest globally at 81%. Financial security creates the foundation upon which career satisfaction can be built.

For young professionals, negotiating for fair compensation is essential. The ability to pay off MBA loans, afford a lifestyle equal to their social circle, and build financial stability - maybe even send money home - directly impacts both lifestyle and psychological well-being.

Daniel Pink, in his seminal work "Drive," captures this reality: "You should pay enough to take the issue of money off the table" before intrinsic motivators can take precedence.

But here's where conventional wisdom starts to crack.

The strategy of perpetual job-hopping for incremental pay increases may exact a hidden toll. Each move for a modest salary bump interrupts what I call the "compounding power of skill building." Like compound interest in investing, professional growth accelerates over time when allowed to build upon itself.

Think about the ambitious analyst who changes firms every eighteen months, chasing 15-20% salary increases. While their bank account grows, their expertise and their network remains frustratingly shallow. They master processes and systems but never develop deep institutional knowledge, complex relationship networks, or the nuanced understanding that comes from weathering multiple growth cycles in one place.

What they gain in immediate compensation, they lose in exponential career growth.

The Critical Inflection Point: When the Rules Change

Somewhere around the AVP or General Manager level, where we see that transition from execution to strategy, something remarkable happens. The relationship between compensation growth and job satisfaction begins to invert.

Michael Page's India Talent Trends 2024 report reveals a striking paradox: while 94% of Indian employees are open to exploring different roles in 2024, 48% prioritize better company culture over compensation when considering job moves. This indicates that despite India's high salary satisfaction, other factors become exponentially more important as professionals advance.

The Nasscom Technology Industry Compensation Benchmarking Survey 2024 shows that average salary increments dropped significantly in the tech sector, yet leading retention strategies now focus on enhanced employee engagement, wellbeing initiatives, and job rotation opportunities rather than purely compensation-based approaches.

Linkedin’s recent Workforce Confidence Index Report for India threw up two very interesting data points - while 1 in 2 employees are unwilling to take a pay cut in lieu of benefits, a little over a third of the employees surveyed were willing to take a salary cut for a company better aligned to their values. 

Cookie cutter approaches never work - sustainable growth and change comes from working with people's realities, not against them.

And the reality is that once you reach financial security, additional compensation provides diminishing returns while other factors become exponentially more important.

So what does this mean? At what level do people become more cognizant of their intrinsic motivations and try and find levers that will keep them going? At what point does the seemingly professional Maslow’s Hierarchy of Needs move from sustenance and addressing the basic hygiene tenets of professional life, to  more deeper purpose driven needs, of belonging, sense of alignment and connection?

What Actually Drives Leadership Satisfaction

So if not money, then what creates lasting satisfaction in senior roles? The answer lies in what researchers call the trinity of intrinsic motivation: autonomy, mastery, and purpose.

Daniel Pink's research identifies these as essential for enduring motivation:

  • Autonomy: Control over what we do and how we do it
  • Mastery: Making progress at something that matters
  • Purpose: Contributing to something larger than ourselves

At leadership levels, these motivators become exponentially more important than in execution-focused roles. The VP of Marketing who shapes product direction, develops innovative campaigns, and sees direct impact on customer behavior experiences satisfaction no salary increase can replicate.

This explains why successful executives report feeling most energized not during compensation discussions, but during breakthrough moments—solving complex challenges, developing others' capabilities, or driving meaningful change.

For me personally, this played out when I took up the role at Blume Ventures to be their first senior People hire and formalise the People and Culture function. It was multiple firsts for me - the first making a shift to a completely different industry, and the first in building a function from scratch and coalescing the valiant efforts of the partnership until then in steering several people processes. That efforts pays off dividends today, four years later, when I can firmly see my fingerprint on several of Blume’s people and culture initiatives and take a bit of well-deserved pride in what we built from Notion pages and Google sheets into an organisation 2 timesx its size. There’s a satisfaction there that couldn’t be bought by higher compensation at that time - you literally have to roll up your sleeves and build. This may be more relevant for senior leaders who are looking for new challenges and have the knowledge and building blocks to do this.

The Zinnov GCC Salary and Hiring Trends Report 2023-2024 validates this insight, showing that as Global Capability Centers in India matured, salary increments dropped by 1-2% across functions, yet organizations focused on retention through differentiated benefits, internal talent development, and specialized skill-building rather than pure compensation increases.

Sidebar One: The Hidden Power of Emotional Intelligence

Here's where the story takes a fascinating turn. Longitudinal research shows that emotional intelligence, long dismissed as a "soft skill", may be one of the strongest predictors of both leadership effectiveness and financial success. The study tracked college students for over a decade and found that emotional intelligence during college predicted salary 10-12 years later.

But here's the crucial insight: the compensation followed the skill development, not the other way around.

Leaders with high emotional intelligence excel at reading organizational dynamics, building coalitions, and inspiring performance in others. These abilities create value that organizations recognize and reward. Research confirms that interpersonal and leadership skills help achieve greater financial compensation, with effects more extensive at the highest organizational levels.

The mentoring component is particularly compelling. Leaders who invest in developing others are driven by purpose rather than immediate financial gain. They often find this investment returns multifold through expanded networks, enhanced reputation, and unexpected career opportunities.

You don't have to be nice all the time – but you do have to genuinely care about people. And the business. 

The best leaders understand this balance and develop the emotional intelligence to navigate it effectively.

Sidebar Two: The AI Factor and Why This Matters More Than Ever 

As artificial intelligence reshapes work, this shift toward intrinsic motivation becomes even more critical. IMF research shows that almost 40% of global employment is exposed to AI, but the impact isn't evenly distributed.

Here's what's happening: Leaders whose roles involve routine analysis or predictable problem-solving are finding their work increasingly automated, and their job satisfaction plummeting. Meanwhile, leaders whose roles center on complex human judgment, emotional intelligence, and creative strategy are experiencing AI-powered productivity boosts that actually increase satisfaction.

Recent data shows AI is already automating or augmenting about 25% of tasks across all jobs. But the critical distinction is between automation (where AI replaces human work) and augmentation (where AI enhances human capabilities).

Leaders in augmented roles report higher satisfaction and less concern about compensation because they feel their value increasing. Those in automated roles show the opposite: decreased satisfaction and increased focus on salary as their primary measure of worth.

AI is forcing us to rediscover what makes work fundamentally human—and those uniquely human capabilities are precisely what provide the deepest satisfaction when approached with intrinsic rather than extrinsic motivation.

What Your Brain Really Wants

The most compelling evidence for moving beyond compensation comes from neuroscience. Brain imaging studies reveal that monetary rewards and social recognition activate the same brain regions and produce identical neurological responses.

This finding upends decades of assumptions about motivation. Research shows that when given a choice between money and social connection, we're actually motivated more by social rewards. The brain experiences genuine pleasure when we're socially rewarded—when we give, when people cooperate with us, when we receive recognition.

For leaders, this validates what many suspect intuitively: the satisfaction from developing breakthrough strategy, earning team loyalty, or being recognized for vision isn't just psychological. It's a neurological reward as powerful as any bonus.

Practical Implications: Redesigning Your Career Strategy

So what does this mean for leaders navigating career decisions? The research suggests a fundamentally different approach, particularly as you move into strategic roles.

Reframe negotiation conversations. Rather than focusing primarily on salary, negotiate for autonomy, learning opportunities, and scope of impact. The VP who secures the right to restructure their team or launch new initiatives may be getting more valuable compensation than a salary increase.

Invest in relationship capital. Research on leadership effectiveness shows that when leaders manage emotions and provide empathic support, their teams can withstand high stress without burning out. Leaders who focus on developing others often find this investment returns through expanded opportunities and enhanced reputations.

Seek stretch assignments over salary bumps. The director who volunteers for a turnaround project may not see immediate financial benefit, but they're building capabilities that create exponential career value over time.

There is merit in understanding the value of systems and processes and seeing how individual contributions impact the bigger picture. This long-term thinking often yields better results than short-term compensation optimization.

Resolving the Paradox

Remember that friend from my opening? 

A month after our conversation, she made a decision. She took a role with a 20% pay cut but significantly more autonomy, a clear path to mastery in a functional role at a young startup that was strongly purpose-driven. Ten months later, she was promoted to Chief Strategy Officer with compensation that exceeded her previous one. More importantly, she was energized by her work in ways she hadn't felt in years.

Her story illustrates the resolution to the compensation paradox: those who stop chasing compensation often find that compensation begins chasing them.

Rome wasn't built in a day, but they were laying bricks every hour.

The most successful leaders discover that pursuing something larger than themselves leads not just to greater satisfaction, but often to greater financial success as well.

The compensation paradox reveals something profound about human motivation: beyond a threshold of financial security, our deepest satisfaction comes not from what we accumulate, but from what we contribute. The real world will always be messy and not clear-cut, you need to know how to make sense of the situation without getting caught up in the short-term allure of incremental pay increases that may ultimately derail the very success they promise to deliver.

The future belongs to leaders who understand that in an AI-augmented world, the most valuable currency isn't salary—it's the ability to create meaning, develop others, and solve problems that matter. And remarkably, when you focus on building that currency, the traditional kind tends to follow.

For deeper exploration of these concepts, I recommend:

Research sources: ADP People at Work 2024, Michael Page India Talent Trends 2024, Nasscom Technology Industry Compensation Survey, Zinnov GCC Report, Journal of Organizational Behavior, Center for Creative Leadership, IMF, and neuroscience studies on motivation and reward systems.

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