From Dollars to Sense: Placing a Monetary Value on Non-Cash Compensation Encourages Employees to Value Time over Money

Ashley V. Whillans; Ryan  Dwyer; Jaewon  Yoon; Allan  Schweyer

Working Paper | HBS Working Paper Series | 2019

From Dollars to Sense: Placing a Monetary Value on Non-Cash Compensation Encourages Employees to Value Time over Money

by Ashley V. Whillans, Ryan Dwyer, Jaewon Yoon and Allan Schweyer

Abstract

When deciding where to work, employees may focus too much on salary and not enough on non-cash benefits such as paid time-off, potentially undermining their long-term happiness. We propose a simple solution to encourage employees to recognize the value of non-cash benefits: list the financial value of non-cash compensation. Results from one archival data set (n = 42,271) and eight studies (n = 3,190) provide evidence for these ideas. First, as expected, employees who receive non-cash compensation are happier than employees who do not. Yet, prospective employees underestimate the happiness benefit of non-cash benefits. Second, and most critically, prospective employees are more likely to choose jobs with greater non-cash benefits and lower salaries when the cash value of these non-cash benefits are listed. Providing a mechanism for our results: organizations that list the cash value of non-cash benefits are perceived as caring more about their employees and about work-life balance. We document a boundary condition: listing the cash value of non-cash rewards effectively shifts employment preferences only when the starting salary of the job is sufficiently high. These findings provide the first evidence that listing the cash value of non-cash rewards increases the attractiveness of non-cash compensation.

Keywords: non-cash compensation; Salary; benefits; time; money; Compensation and Benefits; Wages; Work-Life Balance; Perception; Decision Making; Happiness;

Language: English

Format: Print

68 pages

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Citation:

Whillans, Ashley V., Ryan Dwyer, Jaewon Yoon, and Allan Schweyer. "From Dollars to Sense: Placing a Monetary Value on Non-Cash Compensation Encourages Employees to Value Time over Money." Harvard Business School Working Paper, No. 18-059, January 2018. (Updated January 2019.)

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From Dollars to Sense: Placing a Monetary Value on Non-Cash Compensation Encourages Employees to Value Time over Money

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