It's not the size of the gift; it's how you present it
Subtitle: new evidence on gift exchange from a field experiment
By: Duncan Gilchrist, Michael Luca, Deepak Malhotra
Contributors: Luca, Michael; Malhotra, Deepak, 1975-; Harvard Business School
Series: Working paper / Harvard Business School -- 14-030; Working paper (Harvard Business School) -- 14-030
Publisher: Harvard Business School
Published: 2013
Place of publication: Boston]
Language: eng
Number of pages: 22
Description: Behavioral economists argue that above-market wages elicit reciprocity, causing employees to work harder--even in the absence of repeated interactions or strategic career concerns. In a field experiment with 266 employees, we show that paying abovemarket wages, per se, does not have an effect on effort. However, structuring a portion of the wage as a clear and unexpected gift (by hiring at a given wage, and then offering a raise with no further conditions after the employee has accepted the contract) does lead to persistently higher effort. Consistent with the idea that the recipient's interpretation of the wage as a gift is an important factor, we find that effects are strongest for employees with the most experience and those who have worked most recently--precisely the individuals who would recognize that this is a gift.
Notes: "September 2013."--Publisher's Web site.

Includes bibliographical references (pages 12-13).