Money, Money Changes Everything
It’s holiday time, when gift-giving abounds and employers decide the best ways to reward their teams. A new study from the University of Toronto says that if you want happy recipients, keep in mind that our sense of fairness depends on whether the gift is monetary or not.
When rewarding a group for a job well done, researchers found, vacation days, food, and other non-monetary gifts are viewed as fair when distributed equally, but when the reward is money—even credit card points—recipients claim that if the amount given is equal, then the gift-giving is unfairly distributed. The attitude shifts to a market-based attitude, the study found, in which people feel as if rewards should be doled according to how much the recipient has contributed.
"What exactly is it about money that causes people to treat it so differently than other resources?" Sanford DeVoe, an assistant professor of organizational behavior at the University of Toronto, said in a pubic statement. De Voe co-wrote the paper, which will be published in an upcoming issue of Psychological Science, with Sheena Iyengar of Columbia University.
"The paper shows that it is the property of money being a medium of exchange," De Voe added. "When you allocate something that only has its value in what it can be exchanged for, that is what activates a market mindset and really invokes these strong norms about input and effort leading to reward."
Why does money change the perception of fairness when members of a group are rewarded?
“Association with money is instigated almost at the same time we learn language as an adolescent,” explains Amresh Kumar, Ph.D, assistant professor of marketing at PA –based Susquehanna University.”
“It is engraved on to our brains, that everything in this world is of value,” Kumar, who was not involved in the Toronto study, adds. “Very early on we learn to connect between superior quality and higher prices of products. Unfortunately this transcends into human performance as well.”
Kumar says that this notion of higher price equaling higher quality has made people feel as if even people who make more money are worth more than others.
“I am sure you will find 99 percent of us humans will not accept this at a conscious level, but sub-consciously this is very true,” he maintains. “Thus when a colleague is given money as a reward, this connection is triggered and a feeling that the employer is making a statement that he or she is better than you are leaves a bad taste in the mouth.”
Emotions and money become tied together to form hot buttons for many people, experts agree.
“Money becomes the substitute for deep emotional needs,” adds psychotherapist and business consultant Eddie Reece, MS, LPC. “One of those needs is from our childhood where we wrongly learned that life is fair, meaning equal to all. Since life isn’t fair, in this case the giving of rewards, the upset comes not from the differences in pay, but in the feeling of being treated unfairly. Emotionally, that would mean, ‘You’re not good enough.’”
Businesses and organizations can use this knowledge to enhance staff harmony, but they must be mindful of the best ways to do so.
“It is very crucial for employers to avoid public rewards in terms of money when possible,” Kumar advises. “I am sure bonuses can still be issued.”
One effective way to reward employees is to make it personal. “Customized rewards catered to employees could actually create a positive effect, for example, if a particular employee who loves skiing needs to be rewarded for his or her performance and he or she is given a ski trip vacation,” Kumar explains. “[This] could spill over into a positive effect [of] the employer being [considered] thoughtful. This strategy could be used across the board as the hedonic values we humans have for the things that we love are priceless.”
Some other ways for employers to make their employees feel valuable, Kumar suggests, are to offer prime parking spots for the employee of the month, lunch with the CEO, owner or manager, tickets to a sporting event or concert in which the recipient has shown interest, customized office furniture, or letting an employee lead a meeting, discussion or project.
“What companies need to do in this regard is to tend to the emotional needs of employees,” Reece concludes. “Create a sense of belonging, of being important, of being needed. You do that through relationships, not money.”
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