Who Is More Useful? The Impact of Performance Incentives on Work and Personal Relationships

Julia  Hur; Alice  Lee-Yoon; Ashley V. Whillans

Working Paper | HBS Working Paper Series | 2018

Who Is More Useful? The Impact of Performance Incentives on Work and Personal Relationships

by Julia Hur, Alice Lee-Yoon and Ashley V. Whillans

Abstract

Employees today report being too busy to talk to their friends and family, even though the number of hours they work has remained relatively constant over the last five decades. We highlight incentive systems as one underappreciated factor contributing to this phenomenon and explore the role of incentives in shaping how employees think about their different social relationships. Results from one archival dataset, one panel survey, and two experiments (n = 132,139) show that when employees are paid for performance, they prioritize spending time socializing with work colleagues at the sacrifice of spending time with friends and family. We further document goal instrumentality as a mechanism for these results: employees who receive performance incentives perceive their work ties as highly instrumental in achieving their goals. These findings provide the first empirical evidence that incentives shape employees’ social interactions within and outside of work, potentially providing a novel explanation for the dissolution of familial and personal ties in many developed countries.

Keywords: Performance incentives; work-family boundary management; instrumentality; emotions; lonelines; Employees; Performance; Motivation and Incentives; Work-Life Balance; Emotions;

Language: English

Format: Print

59 pages

Read Now

Citation:

Hur, Julia, Alice Lee-Yoon, and Ashley V. Whillans. "Who Is More Useful? The Impact of Performance Incentives on Work and Personal Relationships." Harvard Business School Working Paper, No. 19-050, October 2018. (Revised December 2018.)

Across five field experiments with employees of a large organization (N=68, 915), we examined whether standard behavioral science interventions (i.e., ‘nudges’) successfully reduced single occupancy vehicle commutes. In Study 1-2, we sent letters and emails that included standard nudges to increase carpooling. These interventions failed to meaningfully increase carpool sign-up or usage. In Studies 3-5, we examined the efficacy of two other well-established behaviorally-informed interventions: non-cash incentives and personalized travel plans. Again, we found no meaningful effects. Across studies the effect sizes were d=[-0.01, 0.05], with a meta-analytic effect size of d = 0.02, 95CI [-0.02, 0.06]. Equivalence testing reveals that the effect size of four of the studies is statistically equivalent to zero (p < 0.0001). Our paper presents the first set of highly powered behaviorally informed experiments on these outcomes and highlights the importance of publishing null results to build cumulative knowledge about how to encourage sustainable travel.

You have had a tough day at work. Your presentation did not go well; your boss harshly critiqued your performance; a colleague was promoted to a position you had hoped to fill; and, on top of it all, some of your coworkers planned to go out after work and you were not invited. Anyone would feel lousy at the end of this day. But what helps you learn from these experiences and get back to business tomorrow is resilience. Resilience, the ability to adapt and recover from personal and professional setbacks, is increasingly recognized as a key driver of job performance. For those who lack resilience, a bad day can seriously throw them off their game, lowering their sense of worth, attitude toward their job, and work performance. In our recent research, we looked at whether using a brief, online intervention could build resilience in employees. We found that distressed employees who used such an intervention a few times per week showed significantly greater increases in resilience than employees who did not.

Deadlines are one of the biggest sources of stress in the workplace. Yet, many are flexible: Your manager might ask you to submit a proposal for a long-term project by Friday, but not plan to look at it until Tuesday. Could asking for more time (when we need it) be a simple way to avoid feeling panicked and overwhelmed? While it’s common to believe that pushing back a deadline might reflect poorly on us and be seen as unprofessional, we know relatively little from research about the actual consequences of asking for more time. To better understand this, we conducted 10 experiments and a survey with nearly 10,000 employees and managers in the United States. We found that, across occupations, asking for more time to work on an assignment was, on average, perceived positively by managers—and it reduced employees’ stress levels and improved their performance. In one survey—of 191 employees—we found that 95% of those who asked their manager for a deadline extension received one.

Faculty & Research

Who Is More Useful? The Impact of Performance Incentives on Work and Personal Relationships

Abstract

Citation:

About the Author

More from the Author