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For Love or Money? Motivating Workers

  • Saima Naeem

    (Pakistan Institute of Development Economics, Islamabad)

  • Asad Zaman

    (Pakistan Institute of Development Economics, Islamabad)

We conducted a field experiment and tested how employers can use socioemotional resources, such as appreciation and recognition, in order to signal intentions and create positive reciprocal relationships with employees. Results showed that these resources led to a significant gain in productivity. The study was extended to account for relative wage concerns both with and without appreciation treatment. Efficiency gains with appreciation appeared to be robust even after including information regarding relatively disadvantageous wage discrimination. However, workers’ without socioemotional resources exhibited strong resentment toward relatively lower wages by showing a significant systematic decrease in their labour supply. Our results suggest that workers not only compare their wages, as pointed out in previous literature, but also compare the socioemotional resources provided by their employer. This provides important evidence against one-dimensional comparisons of relative wages relevant to worker productivity.

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Paper provided by Pakistan Institute of Development Economics in its series PIDE-Working Papers with number 2013:90.

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Length: 27 pages
Date of creation: 2013
Date of revision:
Handle: RePEc:pid:wpaper:2013:90
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