Employees today report being too busy to talk with their friends and family, even though the number of hours that employees work has remained relatively constant over the last five decades. To explain this paradox, we explore the role of incentive systems in shaping how employees think about and allocate time to their social relationships. Across 4 studies (n = 132,139), we examine how exposure to performance incentives shape employees’ social interactions. Results from one archival dataset, one panel survey, and two experiments show that when employees’ pay is contingent on performance, they prioritize spending time with work ties at the sacrifice of spending time with personal ties. We also document a mechanism for these results: employees who are rewarded for their performance perceive work ties as more instrumental. These results are strongest when performance incentives are based on peer evaluations and administered to employees (vs. managers). These findings provide the first empirical evidence incentives shape employees’ social interactions both within and outside of the workplace, potentially providing a novel explanation for the dissolution of familial and close ties in North America.
Keywords: Performance incentives; work-family boundary management; instrumentality; emotions; lonelines; Employees; Performance; Motivation and Incentives; Work-Life Balance; Emotions;
Citation:
Hur, Julia, Alice Lee-Yoon, and Ashley V. Whillans. "The Contrasting Effects of Performance Incentives: How Exposure to Incentives Shape Social Interactions Within and Outside Organizations." Harvard Business School Working Paper, No. 19-050, October 2018. View Details