A few weeks ago I wrote about some new research looking at the role money plays in collaborative behaviour.  The research found that in an environment with no currency involved, people tended to behave in a self-interested way.  When currency was introduced however, it became a means of trading trust between participants, and collaboration increased.

“It’s not that they trusted others, but they trusted that others would help in exchange for a token,” the researchers explained. “This object, which has no intrinsic value, acquired value and became a symbol of trust.”

A fresh study conducted by Harvard has similarly explored the role money plays in workplace behaviour.  They wanted to test in particular whether people worked harder when they were paid more.

The researchers conducted a field study of 266 workers recruited via oDesk.com and placed into one of three groups, with each group oblivious to the other two.  One of the groups was given a low starting pay rate of $3 per hour (still higher than the participants standard hourly rate), with another group paid $4 per hour.  The employees in the $4 group performed no better than those in the $3 group.

“When someone is paid $4,” said the researchers of the findings, “even though it is more than they are used to making or expecting, there may be no reason for them to interpret this as a gift or concession from the employer. More likely, they just assume that their expectations were wrong, and $4 is ‘the going rate’ for this type of work.”

Things get interesting however when we analyse the third group.  They were paid an initial fee of $3 per hour, but then received a surprise bonus of $1 per hour to bring them into line with the best paid group.  This bonus was not related to performance, but was instead an impartial gift awarded to each worker once they had agreed to the initial fee, with the reason given that the budget for the project was larger than expected.

“Those who were promised $3 but then later were given an additional $1 worked significantly harder than the other two groups,” the researchers said. “We attribute this to the salience of the gift: It was obvious to them that we didn’t have to give this additional compensation, but that we had chosen to.”

In other words, because the employer did something nice for them, they felt compelled to return the compliment by way of extra effort.  So much extra effort in fact that they performed 20% higher than the other two groups.

The findings chime with research into so called prosocial bonuses, whereby employees are awarded a bonus under the proviso that they award that bonus to a strong performing colleague.  They calculated that when a $10 bonus was given to a salesman to spend on himself, he only generated $3 in extra sales, so a $7 loss.  When the salesman was given a $10 bonus to give to a colleague however, the prosocial bonus yielded an extra $52 in increased sales.