Needs Versus Wants: Which Motivates More Effort?

34 Pages Posted: 18 Aug 2018 Last revised: 16 Jan 2019

See all articles by W. Timothy Mitchell

W. Timothy Mitchell

University of Massachusetts - Isenberg School of Management

Adam Presslee

University of Waterloo - School of Accounting and Finance

Axel K-D Schulz

La Trobe University

Alan Webb

University of Waterloo - School of Accounting and Finance

Date Written: August 17, 2018

Abstract

A significant and increasing number of North American organizations use tangible rewards to motivate their employees. Despite the widespread use of tangible rewards, there is limited understanding as to what makes them effective. Our study has two related purposes. First, we use a lab experiment to examine the extent to which the utilitarian versus hedonic nature of performance-contingent tangible rewards affects participants’ effort. Consistent with mental accounting theory, we find participants eligible for hedonic tangible rewards outperform participants eligible for utilitarian tangible rewards. Second, we use a separate follow-up lab experiment to examine whether differentially framing the potential use of cash rewards on hedonic versus utilitarian items can achieve the same effect on effort as we observed in our first experiment. Using the same task and procedures as the first experiment, we find no difference in participants’ performance between our two framed cash conditions. Implications for theory and practice are discussed.

Keywords: effort, hedonic, performance, rewards, tangible, utilitarian

Suggested Citation

Mitchell, William Timothy and Presslee, Adam and Schulz, Axel K-D and Webb, Alan, Needs Versus Wants: Which Motivates More Effort? (August 17, 2018). 2019 Canadian Academic Accounting Association (CAAA) Annual Conference. Available at SSRN: https://ssrn.com/abstract=3233955 or http://dx.doi.org/10.2139/ssrn.3233955

William Timothy Mitchell

University of Massachusetts - Isenberg School of Management ( email )

Amherst, MA 01003-4910
United States
4135750012 (Phone)
4135453858 (Fax)

Adam Presslee (Contact Author)

University of Waterloo - School of Accounting and Finance ( email )

Waterloo, ON
Canada

Axel K-D Schulz

La Trobe University ( email )

Victoria 3552, 3086
Australia

Alan Webb

University of Waterloo - School of Accounting and Finance ( email )

200 University Avenue West
Waterloo, Ontario N2L 3G1 N2L 3G1
Canada

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