GIFTS BEAT CASH

Gifts can boost worker productivity on a scale that cash can't match, a study shows.

In 2007 and 2010, researchers recruited subjects for three hours' work, cataloging books at a university economics department for €12 ($16.30) an hour. Before workers started, some were told they'd get an extra €7—a random bonus. Others got a thermos, also worth about €7, wrapped as a gift.

The researchers measured productivity by counting characters in the workers' database entries. Workers who got the gift were 25% more productive than a control group who got nothing, while the "cash" group's productivity boost was statistically insignificant. The beneficial effect on productivity persisted when subjects were told the thermos's value, and even when they could choose to take the thermos or cash. (Strikingly, more than 90% picked cash).

"The Currency of Reciprocity—Gift Exchange in the Workplace," Sebastian Kube, Michel André Maréchal and Clemens Puppe, American Economic Review (forthcoming)