Research Paper:
Pay is employees’ choice of job satisfaction

MGT 6671
Organizational Behavior
Dr. James P. Murphy

By Larry Sizer
Due March 3, 2010

Table of Contents

Introduction3
Thesis Statement3

Body3-7
Sonic Dealership scenario3-4 Student loan survey4 Michigan legal assistant survey4-5 Why we work article5-6 Kenneth Dixon interview6-7

Conclusion7

Bibliography8

With the recent downturn of the economy times are harder than they have ever been in my generation as an adult. The recession brought the obvious rise in layoffs, unemployment, furloughs, pay and hire freezes. During this period, the working class is doing whatever they can told hold on to the jobs, salary and benefits that they currently have rather than exploring more rewarding options. An article in BusinessWest states, many companies that do offer raises, even in a recession, say they need to keep their people happy, as well as attract top talent. I have always believed that money was the main reason people went to work and they could care less about what the duties were as long as the job paid well. Recently I was challenged on that thought as I moved from a low paying position into a higher paying position. I enjoyed my job functions in the lower paid position but I detest the work that I do in the higher paid position, but if asked the choice to stay in my current position or go back to my previous position in which I enjoyed, I would choose to stay with the higher paying job. If both position paid the same, there would be no doubt in my mind that I would go back to my previous position. This revelation made me want to further investigate what the norm is when it comes to job satisfaction. I was curious to know what was more important to an employee in a job, the duties or the pay? So I researched several viewpoints on this issue and majority of the research lead to the same answer. Employees tend to choose salary as their reason to satisfaction on the job.
When I look back, the answer was starring me in the face the whole time because the fact that the only way I would go back to a job that I enjoyed what I was doing is if the pay was increased. Employers have started to figure this out and some are acting on it. Sonic is a Charlotte, N.C. based dealership that had a history of high turnover. Over the past years their turnover rate ranged from 90 to 105 percent. When their vice president, Jeff Dyke, visited one of their dealerships he discovered that some of the employees there were so underpaid that the workers had moved in together just to make ends meet. The turnover at the location alone was 260 percent. Sonic managed this the old-fashioned way, states President Scott Smith, and they raised employees pay. They reviewed their compensation rates and found that they were paying employees below the industry norm. To give their employees adequate pay they asked themselves what should their employees make if they sold 15 cars a month and developed a pay plan around it. They also brought in a research team to survey employees about job satisfaction, and tied general managers pay to employee turnover. As a result Sonic’s turnover rate significantly dropped and it now ranges from 58 to 65 percent. Another positive result that Sonic gained was a better demographic of salespeople. They were attracting older and more stable employees. We got a higher-caliber individual, states Smith. Sonic did nothing more than change their employees pay from lagging the market to leading the market and thus reducing turnover. They also reduced the high expenses that come with recruiting and training due to turnover. Reduced turnover is a sign of employee satisfaction all due to an increase in pay and nothing else.
They have been numerous surveys to find the root of job satisfaction and pay is the common denominator almost every time. A student loan survey in HRMagazine shows that students pick pay over job