How Bonus Payments Can Influence Employee Dedication

The last few years have seen a surge in interest in achieving a better work/life balance, but despite this, we still spend large chunks of our day at work.  Indeed, data from the pandemic suggests that we were putting in around 25% more time while working from home than we were when commuting into a place of work.

While research shows that when we have strong personal relationships and friendships with people at work we’re happier and more likely to stay in our jobs, the long hours many are working mean that these relationships are often prioritized to the exclusion of external relationships, including those with our family.

Focusing on money

A recent study from Harvard Business School highlights how many justify this approach by highlighting the extra money they can earn by putting in longer shifts.  While we may think this money will buy us happiness, however, the reverse is often the case.

What’s more, the study shows that our employers play a crucial role in determining the people we spend time with, as the way our pay is structured significantly influences the choices we made.  For instance, when employees receive performance-related pay incentives, they would spend 2% less time with friends and family and 3% more time at work.  This may not sound much, but it adds up to eight days extra per year.

The researchers say that around 75% of companies in the US use some form of an incentive system to motivate employees, but managers may not realize just how influential these schemes are in prompting the kind of workaholism that ultimately leads to burnout and employee disengagement.

“The more our colleagues are central to our goal of making money in the workplace, the more we’re likely to prioritize work interactions over personal interactions,” they say. “More broadly, my research suggests that people who are constantly prioritizing work over their personal lives are less happy, less healthy, and fight more with their romantic partners.”

All work and no play

Across a number of studies, the researchers found a consistent conclusion.  When performance-related pay is on offer, people respond by spending more time at work and with their colleagues and less time with friends and family.

This was the case even when doing so seemed to result in less happiness than peers who had a more balanced lifestyle.  The authors believe their findings demonstrate how influential incentives can be in guiding our behavior.

“Our results suggest that how you start to view the world when you’re paid underperformance incentives is that any moment you are not working is a moment that’s wasted,” they say. “The negative effects of constantly choosing work over personal relationships appear to accumulate over time and in turn contribute to negative mental health outcomes.”

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