How it Works
Employees care about more than just money. Understanding these non-monetary motivations can help organisations incentivise performance. This column presents evidence from a field experiment that explored the motivational effects of ‘meaningful’ work. Recognition and meaning are found to have substitutive motivational effects, while monetary incentives and meaning have additive effects. – Michael
Examples of non-monetary compensation include benefits, flex-time, time off, free or discounted parking, gym membership discounts, retirement matching, mentoring programs, tuition assistance, and childcare. A benefits plan is designed to address a specific need and is often provided in a non-cash form.
As per the minutes, it would be prudent at this stage to wait for a firmer assessment of the outlook for growth and inflation. The Governor noted that low capacity utilisation amid subdued domestic and external demand is likely to delay early revival of investment demand. Real GDP is likely to shrink in the first half of the year, and growth for the full year 2020-21 is estimated to be negative.
Meaning of Work
In a new study, there’s veritas interest in finding out whether the notion of ‘meaningful work’ can be used to address the future questions. Prior studies have shown that a worker’s perceived meaning of a job or task can entail positive effects on work performance. While there is probably no universally accepted definition of ‘meaningful work’, the latter is generally associated with jobs that are positively recognised by others and/or have some point or purpose.
We manipulated the meaning of work in a field experiment in combination with different forms of either non-monetary or monetary incentives. In the high-meaning condition, workers were told that their work, which consisted of entering data into an electronic database, was of great importance for a research project. In the low-meaning condition, workers were told that their work was merely a sort of quality check that most likely would never be used. Additionally and independently of this, we either paid workers a fixed wage (baseline condition), a fixed wage plus piece rate for each data entry (monetary incentive condition) or a fixed wage plus a symbolic award (recognition condition). The latter came in the form of a smiley button that was handed over in public to the best performing worker at the end of a work session. A total of 413 students were hired for our study, which took place in collaboration with a large social survey research centre in Hangzhou, China.
Our results show that first, higher perceived meaning of work leads to higher performance. While in the baseline condition with low meaning, average performance lies at 1,598 data entries per worker (SD 340), average performance is about 15% higher in the high-meaning condition (1,845 data entries, SD 344). This finding of a positive direct effect of meaning is important as it replicates the results of previous studies. Thus, knowing that you matter really matters, which suggests that the provision of meaning can be a low-cost instrument to stimulate work effort.
While monetary incentives in the form of piece rates produce similarly positive performance effects independent of whether meaning of work is high or low, the effect of non-monetary incentives in the form of public recognition critically depends on meaning. If the meaning of the job is low, recognition has a significant positive effect on performance, of about 18%. In contrast, if meaning is high, the effect of recognition on performance is basically zero. Thus, monetary incentives entail stable, positive effects across the two contexts, albeit effects are considerably smaller than each of the individual effects of meaning or recognition alone. However, the effects of meaning and recognition are substitute; each increases work performance alone but adds nothing once the other is present.