We all know money makes the world go round. We also know a nice size salary can make employees very happy. However, for a truly happy employee, his or her earnings should not be inferior to other employees, a study reveals.

The study was carried out by researchers from the Universidad Carlos III in Madrid (UC3M).

Eduardo Pérez Asenjo of UC3M's Economics Department, found that our happiness is directly affected by earnings, which in turn affect our job performance.

"This confirms the hypothesis of what I perceived, but not the way I would like things to be," the author of the study comments. "I would find it healthier not to compare what we earn to what others earn and I think it would be 'better' if these things didn't affect our happiness," he states.

Professor Pérez Asenjo's analysis found that if an individual earns less than his peers he or she will work more hours. The reason for this is because, the individual begins to think if he or she works harder than he or she will end up earning as much as their colleagues.

Additionally, Professor Pérez Asenjo's determined an empirical analysis and stated, " the effect of others' earnings on my happiness is negative, because I compare myself to them and it makes me unhappy to earn less than them; so I work more hours so that I can earn the same as or more than them."

This finding can be applied to labor management or to human resource management in companies.

Professor Pérez Asenjo's concluded employee's happiness is not really considered in the work environment from the company's perspective.

Overall, his findings attribute social comparisons as a very important factor in the workplace.

He believes that a happy worker is much more productive than an unhappy one.