How much is enough? Hint: $10,000 pay raises can backfire

I recently read an interesting article by Kelly Anderson exploring the surge in salary increases for entry-level professionals as top companies try to retain their young talent. Elite law firms and Wall Street companies are paying entry-level associates premium salaries and raises as they attempt to keep people in the fold.

At the same time, employees in some of the industries have become vocal about problems with the work culture. The author cites a group of junior analysts at a New York City investment bank who complained about 100-hour workweeks and the breakdown of their physical and mental health.

But what really got my attention was the “strategy” of two well-known, massive banks that boosted junior bankers’ salaries by $10,000 to $20,000 in an effort to improve the work culture for young employees! If you are an HR professional reading this, you’re probably as aghast as I was.

Money can’t buy well-being

Throwing money at dissatisfied employees isn’t necessarily new, especially among white-collar industries. In the above story, the raises doled out by the two banks created salaries of around $130,000 for first-year associates, i.e., kids just out of college.

So, is $130K enough for young adults to hand over their lives for the sake of company profits? John D. Rockefeller was once asked, “How much money is enough?” His response was, “Just a little bit more.” This from a man who at one point had a net worth roughly equivalent to one percent of the entire U.S. economy.