It is the thought that counts

Is it really all about the money? Scientists think they've found the difference between monetary and non-monetary bonuses.

It is the thought that counts

In an effort to discover how monetary and non-monetary gifts might diversely influence workers’ productivity, German and Swiss scientists designed a simple experiment, the results of which were published last year in The American Economic Review. The researchers, Sebastian Kube, Michel André Maréchal and Clemens Puppe, made some surprising discoveries.

First of all, their experiment demonstrated that non-monetary gifts had a much stronger impact on short-term workers than monetary gifts of an equivalent value. Interestingly, when the workers were presented with a choice between the two, the vast majority chose money, but the gains in productivity were similar to those obtained with the non-monetary gift. And perhaps most surprisingly, the greatest gains in the whole experiment were achieved by simply investing a little time in the presentation of the monetary gift.

Researchers recruited employees to catalogue books in a library for a one-time opportunity, emphasising that there was no chance of re-employment to eliminate individuals’ concerns about reputation. The control group were paid 12 euros an hour, while there were five other ‘treatments’: a 7 euro bonus; a thermos bottle of equivalent value without a price tag; a thermos bottle of equivalent value with a price tag; the choice of a thermos bottle or the extra money; and the 7 euro bonus presented as an origami shirt with a smiley face drawn on the 2 euro coin.

If the workers were to receive a bonus of any sort, this was announced at the beginning of their shift. The workers were isolated from each other and worked at computers with internet browsers while a computer application tracked their output. None were told that they were participating in an experiment.

Ultimately, the cash bonus had no statistically significant impact on the workers’ productivity whereas the thermos bottle gift resulted in a 25% productivity gain on the control group. (This result was closely replicated by the group that were given the thermos bottle with the price tag indicating that they were not overestimating the value of the bottle.)

When workers were given a choice of the money or the bottle, 80% chose the cash, however their productivity was much higher either than in the control group or the group that received the cash bonus, without any choice. The cash gift that was artistically folded into an origami shirt and presented with the smiling coin garnered the greatest increase of all: 29.3%.

“This result is consistent with the common saying, ‘it’s the thought that counts’,” the researchers wrote in their report.

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