Prosocial bonuses increase employee satisfaction and team performance

Area of Science:

• Organizational Behavior
• Social Psychology
• Behavioral Economics

Background:

• Traditional employee bonuses often focus on individual gain.
• The impact of prosocial spending on employee well-being and organizational outcomes is under-explored.
• Understanding novel incentive structures is crucial for enhancing workplace dynamics.

Purpose of the Study:

• To investigate the effects of prosocial bonuses on employee happiness, satisfaction, and performance.
• To determine if shifting bonus allocation from self-spending to spending on others yields measurable benefits.
• To explore the applicability of prosocial bonuses across different industries and cultures.

Main Methods:

• Conducted three field studies involving employees at an Australian bank, Canadian sports teams, and Belgian pharmaceutical sales teams.
• Experiment 1: Provided employees with prosocial bonuses in the form of charitable donations.
• Experiments 2a & 2b: Provided bonuses for team-based prosocial expenditures among teammates.

Main Results:

• Prosocial bonuses in the form of charitable donations increased employee happiness and satisfaction.
• Prosocial bonuses spent on teammates led to improved performance in both sports and sales teams.
• A shift in bonus focus from self to others demonstrated significant positive impacts.

Conclusions:

• Prosocial bonuses represent a novel and effective strategy for enhancing employee well-being and organizational performance.
• Encouraging employees to spend bonuses on others can foster greater job satisfaction and team effectiveness.
• Organizations can achieve measurable benefits by implementing minor adjustments to bonus structures.