Motivating Employees with Goal-Based Prosocial Rewards
49 Pages Posted: 16 Jan 2018 Last revised: 7 Oct 2021
Date Written: October 7, 2021
A recent trend in organizations is to motivate employees with goal-based prosocial rewards, whereby employees must donate their reward to charities upon goal attainment. We conduct two experiments to examine the motivational effects of goal-based prosocial rewards versus cash rewards. We develop our hypotheses based on affective valuation theory, which posits that when valuing outcomes by affect rather than calculation, individuals are largely insensitive to changes in probability of the outcomes. Results of both experiments support our hypotheses. In Experiment 1, we find that individuals use more of an affective (calculative) approach when evaluating goal-based prosocial (cash) rewards. In Experiment 2, we find that goal-based prosocial rewards motivate greater effort than cash rewards when individuals are assigned either a stretch or an easy goal but not when they are assigned a difficult but attainable goal. Collectively, these findings contribute to the understanding of when goal-based affect-rich rewards such as prosocial rewards can be more motivating than traditional cash rewards.
Keywords: affective valuation; calculative valuation; cash reward; effort; goal difficulty; prosocial reward.
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