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The power of gift exchange at work

How can companies increase employee productivity? This is the one-million-dollar question that People’s team (or leaders) are trying to answer. Many companies want to improve employee engagement to increase productivity. The funny thing is that even the question has a “monetary value” when studies show that money is not the answer.

I’m not saying that cash is not important. Still, studies suggest that the factors that evoke job satisfaction (and motivation) are separate and distinct from the factors that lead to job dissatisfaction[1]. According to Frederick Herzberg, salary is one dissatisfaction-avoidance or hygiene factor, extrinsic to the job[2]. What does this mean?

A good wage helps the employee feel less job dissatisfaction, but it is not precisely a motivator.

If it is not money, what else can we give employees to motivate them? The answer is very simple: gifts. Kube, Maréchal, and Puppe ran an experiment published in 2012 about gift exchange at work. They recruited workers for a task at a German university. Besides the control group, one group received a monetary gift in the form of a 20%, the other a thermos bottle (of the same value as the wage increase), independently of performance. They found out that the ones that received money increased their productivity only by 5%, not outweighing the additional cost. On the other hand, the workers who received the bottle had a higher work performance, 25%.

“Maybe the workers thought the thermos bottle was expensive?” Well, the researchers thought about that too. But even when mentioning the price of the bottle for the workers, the productivity increased. The next assumption was that the gift is a way to show that someone thought about the person and took time and effort to do something nice. To test that, they gave employees a monetary gift in the form of origami. The origami crew increased productivity by 29%. This shows that more than just the present or the swag, the effort to show appreciation matters considerably when given a gift.

But why productivity increases after a gift?

The currency of reciprocity can explain that. After receiving the gift, workers feel the need to reciprocate the kind gesture, feeling motivated to perform better at work. Are you surprised by this finding? I must confess that this seemed odd at first, but then I tried to remember a time I felt super motivated at work: I was at the client’s for 50 hours, trying to close a deal — no sleep and, worse, no shower. When I got back to the office at night, there was a big box of chocolate on my desk, with a thank you note from my manager. I was so surprised. Not only was my employer watching my work but giving their time to show they appreciated it. Instead of just leaving the documents and going home to sleep, something I desperately needed, I felt momentum energy and started to organize the documents needed for the next day. Crazy, right? I used to blame the chocolate.

Has a peer even given you a present? Did it change your relationship or your work energy? I’m curious! Was the chocolate or the gift?

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