Almighty Dollar or Root of All Evil? Testing the Effects of Money on Workplace Behavior

What is it about?

The results of several psychological experiments--in combination with conventional wisdom--suggest that thinking about money causes people to behave more selfishly and less cooperatively, particularly in teams. Although these assumptions have important implications for the workplace, they have only been tested on college students in artificial settings. Consequently, we examined the impact of thinking about money on behavior in two samples of professional athletes who represent real employees, working for real money, on real teams. Our results confirmed that people tended to behave more selfishly during the final year of employment contracts (when money is a bigger concern) but did not behave less cooperatively during this time. These findings suggest that although money appears to have a real impact on behavior, this impact is not as negative as has been commonly assumed or reported by psychological experiments.

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Why is it important?

This study has a number of implications for the workplace. For example, we found that performance that is tied to financial rewards increases during times when those rewards are a more prominent concern (e.g., at the end of employment contracts or prior to performance reviews). However, performance tends to return to average or typical levels once these periods are over which suggests that managers should not necessarily expect a person who has been performing like a star very recently to sustain that level of performance once they have a new contract in place or when money is less of a prominent concern. It is noteworthy, though, that spikes in more self-serving behaviors (those tied to financial rewards) do not correspond with decreases in more cooperative, team-serving behaviors and do not adversely affect team success.