The impact of cash or free-time bonuses


Bridgette Hall poses some food for thought: Could incentivising your employees with time to 'slack-off' be the way to boost productivity?

Each year, organisations lose billions of dollars due to plunges in productivity during effective working hours. Most of this comes from on-the-job leisure time, more often than not from browsing the internet for personal use.

In what seems like a contradiction, managers seeking to reduce problems caused by employees using too much on-the-job leisure time should offer bonuses that provide more off-the-job leisure time, according to new research from Frankfurt School of Finance & Management.

Professor Timo Vogelsang, Assistant Professor at the  Frankfurt School of Finance & Management, investigated the impact of cash or free-time bonuses on work performance and leisure time. 

"This study shows that ‘time is not money’ when using a gift of more off-the-job leisure as a form of management control," said Prof Vogelsang. "Compared to money, time has certain favourable characteristics and affects employees’ behaviour at work. Leisure time is a noteworthy alternative to cash bonuses and the various forms of non-cash bonuses currently in use.”

The experiment offered some participants cash and others more leisure time to investigate the impact of cash or free-time bonuses on work performance and leisure time. 

Those given an extra 25 minutes leisure time as a bonus exhibited 60% less on-the-job internet consumption compared to those given extra cash. Also, those given extra leisure time showed increased work performance in terms of completed tasks.

Could this be one answer to quiet quitting?The research suggests that a cash bonus doesn’t affect employees’ on-the-job leisure time nor their work performance. However, gifting employees more off-the-job leisure time does reduce the possibility of on-the-job leisure time of employees and increases their performance while working. 

This is an interesting finding in the context that employee burnout is at an all-time high globally, the 'Great Resignation' has seen millions of employees quit and reevaluate their work-life, and now 'quiet quitting' has emerged as the latest trend to take over social media. Employees are becoming increasingly disengaged while demanding more flexibility.

Becoming the kind of employer that measures quality not quantity of output, while opting for trust and results rather than clock-watching, is one of the ways to hang on to your best employees and save yourself money.

Off-the-job leisure as a bonus can be implemented by informing employees in advance that they can leave early on certain days or that they will be gifted extra holiday days. This suggests that employees may appreciate a better work-life balance over salary increases.

Remote working, flexibility, wellbeing, and digitalisation are not new concepts to anyone working in the HR space. The last two years of the pandemic where companies were forced to adapt-or-die has given more power to employees in what they demand from their workplace and how they see work fitting into their life.

With AI and automation becoming more ubiquitous, a swing towards 'life-work' balance, and the overall global talent shortage, those setting HR policies will need to make sure they're listening to employees and creating a work environment that drives engagement and ultimately, value and fulfilment. 

There is no magic bullet and often a combination of policies is what is going to keep your employees from disengaging. Being an employer of the future means being as adaptable and agile as you expect your staff  to be. Measure success on goals and targets met and understand that work is no longer the be-all-and-end-all of a person's life.

Just like work-from-home and four-day workweeks, offering your employees the opportunity to 'slack off' with more leisure time could be what helps you win the talent war and boost productivity.

Image / Shutterstock

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