UCLA

The prevailing incentive within organizations often comes in the form of money. While extensive research has studied the effectiveness of monetary incentives, the psychological and interpersonal consequences of these incentives remain relatively underexplored. This dissertation aims to fill this gap by exploring the effects of monetary performance incentives on people’s perceptions and social interactions. We then propose a novel alternative: time-based performance incentives, suggesting that this type of incentive has better implications for psychological well-being compared to traditional monetary incentives. First, we examine the impact of monetary performance incentives on people’s perceived instrumentality, and how they shape social interactions (Studies 1-5). Across five studies, we find evidence that exposure to monetary performance incentives encourages individuals to spend more time with work colleagues, even if it prevents them from spending time with friends and family. We document perceived instrumentality as a mechanism for these results: monetary performance incentives lead individuals to perceive their work relationships as more instrumental. We then explore a related construct, perceived objectification, exploring how this perception diminishes the authenticity of social interactions among colleagues (Studies 6-8). We find consistent evidence that people who are exposed to monetary performance incentives perceive themselves and their colleagues as instrumental objects, which is one mechanism that leads people to perceive themselves as less authentic and engage in less authentic social interactions. Finally, in Studies 9-11, we examine aspects of ‘time’ as a performance incentive that enhances people’s feeling of humanness. We find that people who receive a bonus of vacation days experience greater humanness than people who receive an equivalent monetary bonus. One reason is because vacation bonuses, compared to traditional monetary bonuses, are uniquely positioned to allow temporal segmentation from the objectifying work contexts, which then increases feelings of humanness. This work provides important implications for organizations by demonstrating the psychological well-being benefits of rewarding employees with more time off in lieu of more money.