Time is (Not) Money: Incentive Effects of Granting Leisure Time
40 Pages Posted: 15 Oct 2019 Last revised: 22 Feb 2022
Date Written: February 18, 2022
Abstract
Employees spend a considerable amount of their working time enjoying on-the-job leisure. This demonstrates a management control problem but can also function as a novel domain for bonuses. In this study, I investigate the effect of an unconditional bonus (gift) in the form of more leisure time off-the-job. In particular, I examine how this gift of intentional reduction of working time affects employee performance compared to a cash gift. A real-effort laboratory experiment shows that a cash gift does not alter employee performance. A gift of more leisure time off-the-job, however, does increase employee performance through a reduction of on-the-job leisure time. A vignette study among human resource (HR) managers provides external validity for these results. Moreover, it displays further positive influence of leisure time gifts on several other employee outcomes.
Keywords: employee motivation, non-cash gifts, rewards, leisure, informal controls, time-off, management control, experiment
JEL Classification: C91, J33, M52
Suggested Citation: Suggested Citation