Can non-monetary gifts improve performance in the workplace?

Non-monetary incentives for doctors in Tanzania

Speaker: J. Michelle Brock, research economist in the Office of the Chief Economist at the European Bank for Reconstruction and Development (EBRD)
Date: 19 March, 17-18.30
Venue: Upper Meeting Room (103), LIDC, 36 Gordon Square

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This study looks at how gift-exchange and bonus systems function in a natural field setting by measuring the effort response of participants to non-monetary gifts over time. It shows that small unconditional gifts can increase effort in the workplace medium-term period (2 to 4 weeks), not just over short periods as has been shown with students in the laboratory. The field experiment tests the difference in effort response to unconditional gifts delivered immediately, promised unconditional gifts delivered later, and conditional ''gifts" linked to reaching a specific performance target. It finds important benefits from promising to give an unconditional gift later: participants respond positively to a promised gift twice by increasing effort when the gift is promised and again when it is received. A promised gift outperforms both the unconditional gift delivered immediately, which leads to a single positive response, and the conditional gift based on performance, which does not trigger any significant behavioural change after the gift is delivered.

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